Musings on Markets

JANUARY 11, 2024

In the years that I have taught these two classes, I find myself using my corporate finance framework constantly, when valuing companies, and bringing my understanding of valuation into play, when examining how companies should make investing, financing and dividend decisions.

Corporate Finance 145

Corporate Finance Finance Dividends Start-ups 145

Andrew Stolz

AUGUST 5, 2020

The WACC is the average cost of raising capital from all sources, including equity, common shares, preferred shares, and debt. What Impacts the Weighted Average Cost of Capital? The lower the cost of capital, the higher the present value of future cash flows. What is the Importance of the Weighted Average Cost of Capital?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Equity Capital Structure Equity Financing 52

Benzinga

NOVEMBER 25, 2024

Through our diversified and primarily contracted clean energy portfolio, Clearway Energy endeavors to provide our investors with stable and growing dividend income. Our portfolio comprises approximately 11.7 GW of gross capacity in 26 states, including 9 GW of wind, solar, and battery energy storage and over 2.7 Clearway Energy, Inc.'s

Dividends 49

Dividends Capital Structure EBITDA Finance 49

Reynolds Holding

DECEMBER 10, 2023

As a capital allocation decision, share buybacks intersect all three of the main corporate finance activities of investing, financing, and dividends [1]. Buybacks for Financing A company can alter the debt-to-equity ratio of its capital structure by issuing debt and/or buying back shares.

Dividends 45

Dividends Total Shareholder Return Corporate Finance Finance 45

Brian DeChesare

JUNE 1, 2022

Traditionally, the sector was viewed as a defensive play for investors who wanted stable dividends and no drama. Companies tend to offer high, stable dividend yields, and they finance their massive capital expenditures primarily with debt , with the highest leverage ratios of any industry outside of financial institutions.

Banking 98

Banking Equity Book Value Capital Structure 98

Equilest

MARCH 28, 2025

How does negative equity affect dividends? Can a company still raise capital with negative equity? EV is often used to compare companies with different capital structures, as it normalizes for debt levels. Insight Generation: Identifies areas for improvement in capital structure and operations.

Equity 40

Equity Net Debt Enterprise Value Capital Structure 40

Benzinga

AUGUST 13, 2024

87,197 4.6 % Growing adjusted free cash flow per share and return of capital to shareholders On an adjusted basis, Element generated US$0.38 million in total capital investments this quarter. million of cash to common shareholders through dividends and buybacks of common shares in Q2 2024 and first half 2024, respectively.

Dividends 45

Dividends Capital Structure Finance Treasury 45

Equidam

AUGUST 10, 2023

A well-maintained, up-to-date cap table is essential for tracking ownership stakes, equity issuances, transfers, and other changes in the company’s capital structure. Founders can choose to manage this manually using Excel sheets, or leverage the convenience of an equity management platform such as Nimity.

Equity 52

Equity Capital Structure Dividends Marketability 52

Valutico

DECEMBER 15, 2022

It is often used as it eases the comparability between companies from the same industry (without having to worry about asset or capital structure). . This is a very similar multiple to the EV/EBITDA excludes D&A (thus the asset structure). EV/EBITDA – Shows the ratio of Enterprise Value to the EBITDA of a company.

Precedent Transaction Analysis 52

Precedent Transaction Analysis Comparable Company Analysis EBITDA Enterprise Value 52

Valutico

DECEMBER 15, 2022

It is often used as it eases the comparability between companies from the same industry (without having to worry about asset or capital structure). . This is a very similar multiple to the EV/EBITDA excludes D&A (thus the asset structure). EV/EBITDA – Shows the ratio of Enterprise Value to the EBITDA of a company.

Precedent Transaction Analysis 52

Precedent Transaction Analysis Comparable Company Analysis EBITDA Enterprise Value 52

Valutico

APRIL 17, 2023

Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. Finally, tax rate (T) represents taxes associated with interest payments on debt or dividends on equity. What are the Limitations of WACC?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 17, 2023

Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. Finally, tax rate (T) represents taxes associated with interest payments on debt or dividends on equity. What are the Limitations of WACC?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 12, 2023

Determining a company’s “Cost of Capital” is vital in corporate finance and valuation, and the Weighted Average Cost of Capital (WACC) provides a specific way of doing so. Finally, tax rate (T) represents taxes associated with interest payments on debt or dividends on equity. What are the Limitations of WACC?

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

SEPTEMBER 22, 2023

The income-based approach determines a company’s value by assessing its anticipated future income-generating potential, employing methodologies such as Discounted Cash Flow (DCF) Analysis, Capitalization of Earnings, the Income Multiplier Method, Dividend Discount Model (DDM), and Earnings-Based Valuation.

Discounted Cash Flow 52

Discounted Cash Flow Intangible Assets Book Value Asset-based Approach 52

Lighter Capital

JULY 11, 2024

Cash Flow for Financing (CFF) Financing cash flows (CFF) are transactions involving debt , equity, and dividends. These provide insight into the company's capital structure by showing how the company is obtaining and repaying its capital.

Finance 59

Finance Dividends Start-ups Capital Structure 59

Benzinga

APRIL 12, 2023

Brookfield Infrastructure intends to maintain Triton's existing investment grade capital structure, uphold the highest operating and customer service standards for the benefit of Triton's customers and stakeholders, and help grow the business, aided by Brookfield Infrastructure's substantial access to long-term private capital.

Total Shareholder Return 40

Total Shareholder Return Capital Structure Enterprise Value Dividends 40

Reynolds Holding

APRIL 11, 2023

The constituent documents may also contain limitations on the voting rights that may be granted to preferred stock, and the company’s existing capital structure should be reviewed to ensure any new issuance does not violate the terms of existing securities.

Dividends 45

Dividends Capital Structure Equity 45

Benzinga

DECEMBER 21, 2023

The capital structure of the combined company is not risky. Further, Standard's Series B Preferred stock is an equity security (not debt) with no preferred dividend or mandatory redemption feature. The SomaLogic Board secured a fiduciary out that would allow us to accept and execute on a Superior Proposal should one emerge.

Capital Structure 40

Capital Structure Dividends Equity Marketability 40

Auto Dealer Valuation Insights

NOVEMBER 14, 2023

It’s that time of year again. The grocery list has been made, the headcount has been verified, and the dusted box with pilgrim decorations has been taken down from the top shelf of the storage closet. The table might not be set yet, but for the most part, we know who we will be eating turkey with next week on Thanksgiving Day.

Capital Structure 59

Capital Structure Dividends 59

Auto Dealer Valuation Insights

AUGUST 26, 2024

A few weeks ago, we observed private equity investors learning a lesson about liquidity risk, which family shareholders have always known. This week, we turn the tables and explore a PE strategy that might be worth considering for some family businesses.

Equity 52

Equity Marketability Capital Structure Dividends 52

Cooley M&A

SEPTEMBER 16, 2024

In the first structure, the parties can preserve the liquidation preferences (often with a cutback due to common stock being “underwater”) of each of the parties’ preferred stock. In the second structure, the pro forma cap table of the combined company is “flattened” by converting all preferred stock of both parties into common stock.

Equity 52

Equity Finance Capital Structure Equity Financing 52

Auto Dealer Valuation Insights

JULY 18, 2023

I had a conversation with my financial advisor recently. We talked about individual stocks and investments. Once I was dissuaded from going heavy into crypto, AI, and short-dated call options, I brought up a recent Barron’s article on real estate investment trusts or REITs.

Capital Structure 52

Capital Structure Dividends 52

Benzinga

FEBRUARY 29, 2024

million one-time special dividend payment, $59.0 Adjusted Net Income and Adjusted Diluted Earnings Per Share guidance ranges include the impacts from the 2023 one-time special dividend, expiring interest rate swaps, and share buybacks. Full Year 2023 Highlights 1 Revenues of $763.8 million Net Income of $37.3 million, after the $217.7

EBITDA 40

EBITDA Dividends Technology Total Shareholder Return 40

Harvard Corporate Governance

AUGUST 5, 2022

Tags: Capital allocation , Dividends , Executive Compensation , Firm performance , Incentives , Repurchases , Shareholder value.

Capital Structure 214

Capital Structure Dividends Corporate Finance Technology 214

Brian DeChesare

AUGUST 10, 2022

Complications arise because the dividend payouts do not necessarily follow this 2% / 98% split; there’s usually a set of “tiers” with performance incentives, and the split changes in each tier, similar to the real estate waterfall model. it’s after the interest expense and preferred dividend deductions).

Banking 98

Banking Dividends EBITDA Equity 98

Class VI Partner

JULY 28, 2021

It is typically the highest risk/highest potential return portion of a company’s capital structure. Preferred Equity Preferred Equity represents equity in a company that has a liquidation preference over Common Equity and will often have a dividend payment.

Book Value 52

Book Value Equity Enterprise Value Fair Market Value 52

Musings on Markets

OCTOBER 25, 2022

An intuitive reading of the FCFE is that it is cash available to be returned to equity investors, either in the form of dividends or as cash buybacks. It is the rare firm that follows a residual cash policy, returning its FCFE every year as dividends and/or buybacks.

Dividends 107

Dividends Equity EBITDA Start-ups 107