Josh, Author at Finance Interview Coach

Published On - January 2, 2022

Josh Corporate Banking / Commercial Banking / Private Debt, Corporate Development, Financial Modeling, FP&A, Investment Banking, Private Equity

How do you find the cost of debt when building a financial model?

If it’s a public company, you can look up the cost of debt on Bloombergor in their company filings. Different types of debt are often listed in thenotes to the financial statements in a quarterly or annual report and theinterest rate is sometimes provided. If it’s a private company, you can crea...

How would issuing debt affect the P/E ratio?

Issuing debt would usually increase the risk to equity investors, so theywill sell off the stock. This will cause price to go down, which is thenumerator in P/E, so P/E will go down as well. Mathematically, an increase in debt raises levered beta, which is a keycomponent of the cost of equity. With ...

What are beta comps and how do you unlever and relever beta?

Beta comps can be used to find beta for a private company or a newcompany with not enough public trading history. The four steps to do this are:...