How would you advise I go about gaining more valuation practice?

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October 16, 2021

by an member from University of Pennsylvania - The Wharton School in Miami, FL, USA

I currently understand the steps to carry lbo's and dcf's out but I was wondering if there are any practice models with keys to check my work? I would like to further cement the concepts by applying them more readily.

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Reply by an intermediary
from The University of Chicago in Chicago, IL, USA
Corporate Finance as taught today assumes that debt principal is never repaid. If one uses WACC as cost of capital in DCF, you are not only assuming no debt repayment, you are assuming constant capital structure, meaning debt increasing and using such new borrowed month used to pay dividends. I hope I can completer my book Corporate Finance 2.o soon. Meanwhile look at following.
1. SSRN article on Capitalization 2.0 which basically says that using current Gordon Growth Model for Terminal Value is wrong.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=###-###-####
2. Go to www.AltBV. com for Terminal Value
3. Go to www.BVXpress.com for a full DCF valuation model. It is an interactive model for what-if analysis.
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Reply by a searcher
from University of Florida in Miami, FL, USA
I have no affiliation to any of these, but Wall Street Oasis, Wall Street Prep, and Training the Street are all good ways of getting more comfortable with valuation work. Wall Street Oasis is an online forum for finance professionals and has plenty of materials for aspiring finance professionals, including valuation materials. You may be able to find free and more practical training materials there (vs. more theoretical). At the end of the day, however, keep in mind that valuation work is something practiced over time. If you’re valuing an actionable target without plenty of comfort with it, I would be conservative in your assumptions and cautious not to lend any outputs that stray away from reality much weight (or capital).
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