Question:

How do you determine the discount rate in a DCF?

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Answer:

Usually using WACC (Weighted Average Cost of Capital)

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DCF

What are the formulas for un-levering and levering Beta?

Would you expect the cost of equity to be higher for a $1 billion or $100 million market cap company?

Which company would we expect to have a higher beta, an industrials company or an internet company?

How do you calculate beta?

How do you calculate WACC for a private company?

Would you expect the WACC to be higher for a $1 billion or $100 million market cap company?

Walk me through how to get from Revenue to Unlevered Free Cash Flow in your DCF projections

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Why do you usually project out 5-10 years in a DCF?

What happens if you use Levered Free Cash Flow instead of Unlevered Free Cash Flow in your DCF?

How do you calculate cost of equity?

How do you calculate WACC?

Walk me through a DCF

What happens to WACC as you increase leverage?

How do you select the appropriate exit multiple when calculating terminal value?

What is beta?

What is a potential issue with basing terminal multiples on current public company multiples?