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2 votes
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Possible to use diffusion equation(s) to price derivatives with non-zero boundary conditions?

Assuming you mean $P_t=S_T$, that you are pricing under the risk neutral measure $\mathbb{Q}$ and introducing a discount factor $e^{-\int_0^T{r(t)dt}}$, your equation can be rewritten $-$ where $\{\...
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2 votes

Find out the effective monthly discount rate for a 10% annual discount rate

I think that what you want is to convert an annually compounded interest rate to a monthly compounded interest rate, right? $$\left(1+\frac{r_{monthly}}{12}\right)^{12} = (1 + r_{annual})$$ $$r_{...
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2 votes
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How to handle cash from financing in a DCF model?

Lucky for us, the method you’re describing is unnecessarily complicated. M&M state that distributions have no impact on firm value, so why would it in your model? Check out Valuation Models: An ...
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2 votes

Are Accounts Receivable and Accounts Payable already included in revenue?

Your understanding of the mechanics of the construction of a cash flow statement is correct. The cash flow statement, which operating cash flow is part of, is a reconciliation of net profit from the ...
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  • 476
1 vote

Are Accounts Receivable and Accounts Payable already included in revenue?

The way accounting is done for these might help: When you sell something: DR Accts Receivable, CR Revenue So you have added to Revenue and therefore net income, but you did not get any cash. You got ...
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  • 421
1 vote
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Fixed Rate Bond Pricing using QuantLib Python

Starting the zero curve from a date 6 months in the past with respect to the valuation date throws the bond off. If you start the curve at valuationDate instead, ...
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1 vote

Which Risk Free rate to use?

The choice of discount rate should be linked to the payment dates of your cash flows. For cashflows in the near future, use the 3-month T-Bill rates, but for those in 10 years you should use 10-year T-...
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  • 2,059
1 vote

Complicated DCF valuation

https://www.10xebitda.com/hedge-fund-presentations/ - HF decks on stocks they invested in. I'd guess you can find some DCF models or 'more complex models' for valuation in some of these. HTH.
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  • 2,076
1 vote

DCF Valuation Models

There's plenty of resources on the internet but I used to use during a banking internship: https://corporatefinanceinstitute.com/resources/templates/excel-modeling/dcf-model-template/
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1 vote

Newbie question on Net Present Value with Constant Growth

Correct calculation of perpetuity for the next year is following
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  • 11
1 vote
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In DCF, why is the discount rate interpreted as the minimum rate of return?

The discount rate (for interbank trades) is broadly treated as the risk free rate. So at worst you could obtain this rate for no risk, making it the minimum rate of return. No instrument should yield ...
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  • 3,589
1 vote

How can you find change in working capital and capital expenditures without a balance sheet?

You don't provide enough information. Yet, if you provide a little more information it might be possible. In theory -- one may recreate a statement for the source and use of funds (i.e., delta balance ...
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1 vote
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Valuing corporate EUR loan of US entity? Which discount rate to use? US or EU?

You should use whatever currency in which the debt is denominated. Specifically, since it is the EUR currency and interest rate risk associated with the debt, some sort of EUR curve should be used. ...
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Using Gordon's Growth Model to find value of corporation

Under GGM dividends are used, under the assumption of constant growth. You're given FCF under the assumption of constant growth. So you could use FCFF or FCFE models. Since the question is asking for ...
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  • 11
1 vote

Logic behind Gordon Growth Model in a DCF analysis?

Your last cash flow is not correctly expressed as you forgot the $(1+r)^{-5}$ when you reinjected. A $t= 5$ (in 5 years), your PV of the remaining cash flows is: $F_5 \sum_{k=1}^\infty (\frac{1+g}{1+...
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