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  "documentTitle": "Bear Stearns | Investment Banking Pitch Book | 36 slides",
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  "notes": "Part of a DCF Primer document from Bear Stearns.",
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      "text": "Alternatively, adjusted net present value can be applied to address a changing capital structure without having to adjust the company's WACC each year (see p. 29).",
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      "text": "To the extent that lack of marketability/liquidity or minority position is not accounted for in either cost of capital or in the cash flows, it may be appropriate to discount the resulting valuation.",
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      "text": "To value a firm with a rapidly changing capital structure (i.e., an LBO), it will generally be appropriate to use a different WACC during different phases of the forecast period as financial leverage changes.\nIn general, a company should be evaluated based on a forward looking capital structure.\nIf the WACC assumption is based on a dramatic change in capital structure, it may be appropriate to factor in transaction costs.",
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      "text": "Regulated industries (e.g., utilities) may require adjustments to cost of capital estimates due to rate setting.",
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      "text": "While the preceding valuation guidelines generally apply to most situations, it may be appropriate to use different assumptions for companies with rapidly changing capital structures, start-up companies or highly regulated firms.",
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