Category Archives: 1. M&A valuation

AstraZeneca WACC 4.4%!

how to calculate wacc

  WACC calculation of AstraZeneca, a global pharmaceutical company   WACC formula WACC (Weighted Average Cost of Capital) is a weighted average cost of all capital raised by a company after converting its book value into market value.   Ke, Kd after-tax, Kps: cost of equity capital, after tax debt cost, preferred stock cost in […]

Tesla’s cost of debt of 3.9%, 8.0%, which is correct?

cost of debt - jcinus

  How to use the cost of debt formula easily?   What is the cost of debt capital?   Tesla’s summary financial statements as of the end of 2019 (Source: Refinitiv)   When calculating the cost of debt capital, the objects that we should consider are only financial debts that the company must pay interests […]

Samsung Electronics stock beta 1.12, what does it mean?

stock beta

  Definition of beta, adjusted beta, and levered beta   Stock Beta definition and meaning In the CAPM formula, β (stock beta) is the only thing that reflects the properties of individual stocks. If you remove the β (stock beta) from the CAPM formula, all stocks in the same market will have the same yield. […]

Is a Mexican risk free rate 5.35% safe?

risk free rate

  Risk free rate of return and market risk premium   What is a risk free rate of return? Risk free assets are investment assets with no risk of loss. Risk free rate of return is the rate of return provided by those risk free assets, which is the rate of return that investors can […]

Dyson’s cost of equity 8% with CAPM formula

capm formula

  Calculation of Dyson’s cost of equity capital with CAPM formula   Use of CAPM formula The cost of capital and the expected rate of return, which are all used as a discount rate in the DCF model, have the same meaning. Firms as capital consumers may use the cost of capital as the discount […]

Discount rates of 5% and 8%! Which is risky?

discount rate

  An easy way to understand the meaning and role of the discount rate   The role of the discount rate The most crucial task in valuation is to predict the future cash flows the target company will generate. You convert the estimated cash flows into present values ​​to get the value of the target […]

Deliveroo share price 247! Use Price to Sales Ratio.

Price to Sales Ratio

  Price to Sales ratio and EV/Sales ratio (Case study: share value analysis for Deliveroo, Just Eat and Delivery Hero)   Definition of Price to Sales Ratio (PSR or PS ratio)   PS ratio (PSR, Price to Sales Ratio) is a sales multiple in the relative valuation method. It tells how many times the share […]

Tesla PB ratio 36.3, Toyota 1.3! How to interpret this?

PB ratio - jcinus

  Understanding PB ratio (PBR) and comparing the stock price between Tesla and Toyota   What is the PB ratio (Price to Book Value Ratio)?   PB ratio (PBR, Price to Book Value Ratio) refers to how many times the book value of a company’s equity capital is evaluated in the market.   Investors will […]

EV/EBITDA 12! How should it be interpreted in acquisition valuation?

Acquisition valuation

  EV/EBITDA and Acquisition valuation – Case Analysis for Dell Computer   Why is EV/EBITDA suitable for acquisition valuation?   EV/EBITDA is a relative valuation method suitable for acquisition valuation.   That is because EV considers not only the equity value that the buyer should pay to the original owners but also the debt value […]

3 reasons why EV/EBITDA is useful for M&A valuation.

EV/EBITDA - jcinus

  Understanding and practical interpretation of EV/EBITDA   Knowing the difference between EV (Enterprise Value) and equity value is critically important for the use of EV/EBITDA. Suppose there are Flat A and B with the same price in London as shown in the figure below.   Flat A and B with the same price (to […]