Private Company Valuation (2024 Level II CFA® Exam - Equity - Module 6)

[@vedhavyas5649]

Sir hope you make a video on employee compensation too

[@phuonglinhnguyen]

Thank you teacher ❤

[@Meta-morphosis]

The formula for FCFF calculation is wrong - Interest is added there & deducted from FCFE... The interest expense rising every year doesn't make sense... How can it be a % of sales. Not like the debt par keeps changing every year... And the example at 37.23 is extremely confusing... Why aren't we discounting the first FCFF 3.25? Rounding off @47:07 has caused errors. Post discount multiple is 5.9664 & the end value is 288466.56

[@gordonjai906]

Thanks for the video, however there are some calculation errors in the slides, especially in the example starting from 56:09 and also the terminal value at 58:57

[@AR-Race]

The after tax interest expense calculated doesn't make sense (35:50). Surely it should be 10% of the 5m par value? Or some increasing value of debt. It seems to be calculated as a % of depreciation.

[@tanishqagrawal7025]

FCFF method formula seems wrong. In FCFF, Post tax interest should be added back.

[@AR-Race]

Yep! I was looking at it thinking hmmmm ....

[@Meta-morphosis]

Yup True that...

[@erfa10]

At 22:09 you stated that the equity discount is estimated as 1 - [(1-DLOC)(1-DLOM)] but in the last example (1:09:50) you just sum the two discounts, could you clarify which method is generally expected in the exam?

[@gordonjai906]

I would stick with the initial formula and treat the last example as a calculation error and it does not make sense to simply use the sum of DLOC and DLOM to calculate.

[@lokeshpathak780]

Thank ❤