The weighted average cost of capital represents a weighted average of the after-tax cost of debt and the cost of equity where the weighting is based on a company’s target debt-equity ratio, measured at market. Here is how each component of a WACC can be measured: An optimal capital structure… View Full Term
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Special note: This excerpt is used with permission from: Mergers and Acquisitions from A to Z Kindle Edition, by Andrew J. Sherman.There are many different styles of…
By: Andrew J. Sherman
The initial dollar figure presented as a purchase price for a business, whether written on a napkin over coffee or floated in a conversation, is not a binding offer. Any…
By: Paris Aden
When you are selling a business, a buyer will typically require a Phase 1 Environmental Report as part of their due diligence process. This is a pretty standard process…
By: Erick Hamdan
About the HostRyan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of…
By: Ryan Tansom
In mergers & acquisitions, a letter of intent (LOI) is a vital document because, when it is signed, it spells out the preliminary agreement between a buyer and a…
By: Terry Stidham
Hindsight is 20/20, but for the seller of a business, it could be a very costly lesson learned. By the time a seller realizes that his purchase and sale agreement has a…
By: Peter Ferrari
We often hear business owners say, “A competitor just approached me about buying my business. I’ll just sit down with him and cut a deal.” The assumption is that…
What is a Proprietary Deal?In a recent conversation with a partner in a private equity firm, he mentioned that a recent deal had been a proprietary deal. I had not heard…
By: Chris Mercer
From the moment you make initial contact with any potential bidder to the time you close a sale transaction there is a window of vulnerability where you and your…
One of the most critical business decisions an entrepreneur ever makes is selecting an M&A attorney for selling their middle market business. Over the years I have…
By: Peter Alternative
Here is our second installment of "Why Do Deals Fall Apart?" Some of our friends from the private equity world provide sage advice for business owners looking to sell…
By: John Carvalho | President, Divestopedia Inc.
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