Index

A general business overview, 153 Accounting, introduction to, 56–58 management’s discussion and financial, 56 analysis (MD&A), 153–154 generally accepted accounting Apple Inc. principles (GAAP), 57–58 Income statement example, 68 managerial, 57 balance sheet example, 81–83 tax, 56–57 statement of cash flows example, Accounts payable (AP), 73–74 86–87 days, 168–169 Asset managers, 106–107 Accounts receivable (AR), 70 Asset management, 7 days, 168 Asset purchase, 301–302 Accretion/dilution analysis, 311–319 Assets, 69–72 impact of P/E ratios on, 318–319 current, 70–71 Accrual basis of accounting, 59–60 accounts receivable (AR), 70 Accrued expenses, 74 cash and equivalents, 70 Acquisition comps, 211–214 inventories, 70 selecting, 211–212 prepaid expenses, 71 criteria for, 211–212 noncurrent (long-term), 71–72 sources for, 211 intangible, 72 spreading and normalizing, 212–214 property, plant, and equipment Activity ratios, 167–169 (PP&E), 71–72 accounts payable days, 168–169 Associates, 24–25, 39–40, 45 accounts receivable days, 168 compensation, 45 days sales of inventory, 168 exit opportunities for, 46–47 inventory turnover, 168 Amortization, 314–315 B Analysis at various prices (AVP), Balance sheet, 69–83, 90–99, 275–281, 320–321 336–340 Analysts, 23–24,COPYRIGHTED 39, 44 assets, MATERIAL 69–72 compensation, 44 current, 70–71 exit opportunities for, 46 noncurrent (long-term), 71–72 Annual report (SEC Schedule 10-K), consolidation and noncontrolling 149–150, 152–155 interest, 81 cover, 152–153 deferred tax assets and liabilities, exhibits, list of, 154–155 78–81 financial statements, 154 example, 79–81 footnotes to, 154 example (Apple Inc.), 81–83

411

bindex.indd 411 3/4/2013 7:21:27 PM 412 index

Balance sheet (continued ) valuing, 131–134 leases, 77–78 bond prices and interest rates, capital, 77–78 relationship between, 132 operating, 77 zero-coupon bonds, 132–134 liabilities, 72–74 yields, 136–138 current, 73–74 to call, 138 noncurrent, 74 current, 138 net working capital, 76 to maturity, 137–138 pro forma, 336–338 to worst, 138 balancing, 338 Borrowers, 103 cash, 337 Boutique investment banks, 17–20, 41 deferred financing fees, 337 and bulge bracket banks, differences example, 339–340 between, 41, 399–400 existing debt, 338 “bulge bracket lite,” 19–20 goodwill, 337–338 industry focus, 18–19 new debt, 338 middle market focus, 19 new equity, 338 product focus, 18 projecting in integrated cash flow Bulge bracket investment banks, 16–17, model, 275–281 40–41 shareholders’ equity, 74–75 and boutique banks, differences additional paid-in capital, 75 between, 41, 399–400 common or preferred , par differences among, 40 value of, 75 Buyer’s list, 305 retained earnings, 75 treasury stock, 75 C Bank of America Merrill Lynch, 17 Calendarization, 171–173 Bankruptcy, 10–11 Call options, valuing, 141–144 Banks and specialty companies, Black-Scholes formula, 143–144 104–105 Capital asset pricing model (CAPM), Barclays, 17 224–226 Bear Stearns, 17, 23 beta, 226–228 Beta, 226–228 estimating, 226–227 estimating, 226–227 relevering, 228 relevering, 228 unlevering, 227–228 unlevering, 227–228 equity risk premium (ERP), 225–226 Bids, in M&A risk-free rate, 225 closing the deal, 308–309 Capital raisings, 9–10 first round, 306–307 , 126–128 second (final) round, 307–308 and the in the real Black-Scholes formula, 143–144 world, 127–128 Bonds, valuing, 130–139 Modigliani-Miller theorem, 126 duration, 138–139 Cash basis of accounting, 58–59 interest rates, 134–136 Cash and equivalents, 70 default risk and credit ratings, Cash flows 135–136 forecasting, 115–116 term structure of, 134 present and future value of, 111–114

bindex.indd 412 3/4/2013 7:21:27 PM Index 413

future value, 113–114 investing, 115–126 perpetuity, present value of, capital structure, 126–128 112–113 cash flows, forecasting, 115–116 perpetuity with growth, present funds, sources of, 121–126 value of, 113 internal rate of return (IRR) present value, 112 analysis, 116–117, 118 statement of, 83–87, 90–99, (NPV) analysis, 282–285 117, 119–121 example, 86 returning money to investors, from financing activities, 85–86 128–130 from investing activities, 85 Cost of capital, 127–128 from operating activities, 84–85 Cost of equity, 224–228 projecting in integrated cash flow beta, estimating, 226–228 model, 282–285 capital asset pricing model (CAPM), Chinese Wall, 6–7 224–226 Circularity, 258–261 Cost of goods sold (COGS), 61 Citigroup, 17 Cover letters, 367–368 Comparable company methodology, common mistakes, 368 194–210 Credit ratings, 135–136 analyzing and applying multiples, Credit ratios, 165–167 205–210 debt to capitalization, 167 key drivers, 206–209 debt to equity, 167 valuing subject company, interest coverage, 166 209–210 leverage, 165–166 calculating multiples, Credit statistics, analyzing, 344–345 202–205 debt to capitalization ratio, 344 additional financial metrics, 205 interest coverage ratio, 344–345 fully diluted shares, 203–205 leverage ratios, 344 total , 202–203 Credit Suisse, 17 normalizing the financials, 201 Current report (SEC Schedule 8-K), 150 selecting comps, 195–199 criteria for, 195–198 D number of, 198–199 Data room, 307–308 sources for, 198 Days sales of inventory, 168 spreading comps, 199–201 Deal comps, See Acquisition comps required information, 200 Deal teams, 28–29 tips for, 201 Debt, convertible, 204–205 Compensation, 44–45, 401–402 Debt, long-term, 73, 74 Confidential Information Memorandum Debt to capitalization ratio, 167, 344 (CIM), 306 Debt capital markets (DCM), 21 Consolidation and noncontrolling Debt to equity ratio, 167 interest, 81 Debt schedule, projecting in integrated Contribution analysis, 319–320 cash flow model, 285–289 , 216–217 Deferred tax assets and liabilities, , introduction to, 78–81 114–130 example, 79–81

bindex.indd 413 3/4/2013 7:21:27 PM 414 index

Depreciation and amortization expense, E 63–64, 315–317 Earnings before taxes (EBT) or pre-tax Deutsche Bank, 17 income, 66 Directors, See senior vice president Earnings per share, 67 (SVP)/director EBIT margin (operating income Discount rate and opportunity cost of margin), 162 capital, 110–111 EBITDA, 64, 162, 222–223 estimating 110–111 margin, 162 expected inflation rate, 111 Enterprise value, 182–189 real risk-free rate, 111 examples, 188–189 risk premium, 111 formula, 185–188 (DCF) analysis, cash, 187 219–238 debt, 186 conclusions, 237 market value of equity (MVE), probability weighted DCF, 186 237–238 , 187 discounting cash flows and terminal Equity capital markets (ECM), 21 value, 232–235 Equity research, 5–7 combining stub period and Equity risk premium (ERP), 225–226 mid-year discounting, 234 Equity value, estimating, 240–241 discount factor, 234 per share price, 241 mid-year discounting, 233 Exit opportunities, 45–47 stub period, 233 summing to estimate enterprise F value, 235 , 309 , forecasting, 219–221 Finance, corporate. See Corporate unlevered, 220–221 finance sensitivity analysis, running, Finance, principles of, 107–114 235–237 cash flows, present and future value , forecasting, of, 111–114 221–223 future value, 113–114 perpetuity growth methodology, perpetuity, present value of, 221–222 112–113 terminal multiple methodology, perpetuity with growth, present 222–223 value of, 113 weighted average cost of capital present value, 112 (WACC), estimating, 223–232 discount rate and opportunity cost of capital structure, assuming, 231 capital, 110–111 cost of debt, 229–232 estimating 110–111 cost of equity, 224–228, 232 risk and reward, 109–110 cost of preferred, 230–231 time value of money, 108–109 Dividend discount model, 140–141 Financial accounting, 56 with constant growth, 140–141 Financial Accounting Standards Board Due diligence, 304–305 (FASB), 57 Duration, 138–139 Financial markets, 105

bindex.indd 414 3/4/2013 7:21:27 PM Index 415

Financial modeling, 247–292 Financial system, 102–107 integrated cash flow model, 248–292 borrowers, 103 building, 262–292 financial institutions, 103–107 circularity, 258–261 asset managers, 106–107 formatting the model, 256–258 banks and specialty finance modeling best practices, 249–258 companies, 104–105 Financial statement analysis, 147–178 financial markets, 105 financial information, sources of, insurance companies and pension 148–158 funds, 106 equity research reports, 157–158 investment banks, 107 miscellaneous, 158 savers, 102 SEC filings, 148–156 Football field valuation summary, subscription-based data sources, 238–239 156–157 Fundraising, 9–10 “normalizing” the financials, Funds 174–177 sources of, in corporate investing, adjustments, sources for finding, 121–126 175–176 common stock, 124–125 income statement, adjusting, debt, 121–124 176–177 preferred stock, 125–126 non-recurring items, 174 sources of, in LBOs, 335–336 ratio analysis, 159–169 cash from balance sheet, 33 activity ratios, 167–169 new debt, 335–336 credit ratios, 165–167 equity contribution from PE fund growth statistics, 160–161 (sponsor’s equity), 336 profitability ratios (margins), uses of, in LBOs, 334–335 161–163 existing debt to be refinanced, return ratios, 163–165 334–335 time periods, analyzing, 169–173 purchase price, 334 calendarization, 171–173 transaction fees, 334 fiscal quarter, 169–170 fiscal year, 169 G last twelve months (LTM) Generally accepted accounting 170–171 principles (GAAP), 57–58 year-to-date (YTD), 170 Goldman Sachs, 17, 23, 40 Financial statements Grade point average (GPA), 351, 364 integrating, 88–99 Gross profit, 61–62, 161–162 examples, 89–99 margin, 161–162 impacts on, 88 Growth statistics, 160–161 projecting in integrated cash flow compound annual growth rate model, 270–289 (CAGR), 161 balance sheet, 275–281 one-period growth rate, 160 cash flow statement, 282–285 debt schedule, 285–289 H income statement, 271–275 Headhunters, 374–375

bindex.indd 415 3/4/2013 7:21:27 PM 416 index

I manual vs. automatic calculation, Income statement, 58–68, 90–99, 261 271–275 revolver and interest, 258–261 accrual basis of accounting, 59–60 formatting the model, 256–258 cash basis of accounting, 58–59 cells, 257–258 overview, 60–68 worksheets, 256–257 cost of goods sold (COGS), 61 modeling best practices, 249–258 depreciation and amortization assumptions and sources, keeping expense, 63–64 a list of, 255–256 earnings before taxes (EBT) or checking the model 255 pre-tax income, 66 saving the model, 254–255 earnings per share, 67 setting up the model, 252–254 EBITDA, 64 simplicity vs. complexity, 249–251 example, 67–68 starting from scratch vs. using a gross profit, 61–62 template, 251–252 interest expense, 65 using keyboard, 254 net income, 66–67 Interest coverage ratio, 166, 344–345 operating income (EBIT), 62–63 Interest expense, 65, 313 operating vs. non-operating items, Interest income, 313 64–65 Internal rate of return (IRR) revenue, 61 analysis, 116–117, 118–119, selling, general and administrative 341–342, 343–344 (SG&A) expenses, 62 sensitivity, 343–344 tax expense, 66 drivers of, 341, 343 projecting in integrated cash flow decreased company cost structure, model, 271–275 343 Inflation rate, expected, 111 earlier exit from investment, 343 Informational interviews, 373–374 increased company growth rate, 343 Initial (IPO), 9–10 increased exit multiple, 343 Insurance companies, 106 increased leverage, 343 Integrated cash flow model, 248–292 reduced purchase price, 343 building, 262–292 International Accounting Standards calculating key growth statistics Board (IASB), 57 and financial ratios, 264–265 International Financial Reporting checking model and analyzing Standards (IFRS), 57 results, 289–292 Internships, 355–356 learning about company, 262–263 Interviewing. See also Recruiting, projecting financial statements, interviewing, and landing the 270–289 job selecting model assumptions, after the interview, 396–398 265–270 bad signs, 397 spreading and normalizing good signs, 396–397 historical financial statements, rejection and feedback, 398 263–264 response, 397–398 circularity, 258–261 thank-you notes, 397

bindex.indd 416 3/4/2013 7:21:27 PM Index 417

brainteasers, 394–396 full-time positions, recruiting process general tips for, 377–390 for, 356–360 interests or hobbies, 388 non-target recruiting, 358–359 long-term career plans, 386 on campus recruiting (OCR), qualitative (fit) questions, 378 357–358 questions for interviewer, recruiting from other careers or 389–390 industries, 359–360 “strengths” question, 384 hierarchy, 22–29 walking through your resume, analyst, 23–24 378–379 associate, 24–25 “weakness” question, 385–386 deal teams, 28–29 “why banking” question, 379 managing director, 27–28 preparing for, 376 senior vice president (SVP)/ scheduling, 376–377 director, 27 technical interview questions, vice president (VP), 25–27 391–394 lifestyle of, 32–45 accounting and financial compensation, 43–45 statement analysis, 391–392 culture, 33 finance, 392 for females, 42–43 , 393–394 junior bankers, 35–37 general business or finance lifestyle and culture differences, questions, 391 40–42 leveraged buyouts (LBOs), 393 people, 38–40 mergers and acquisitions (M&A), senior bankers, 37–38 393 role of, in leveraged buyouts, 329 questions about deal experience, work of, 29–32 394 administrative tasks, 31–32 valuation, 392–393 analysis, 30 Inventories, 70 creating presentations and other Inventory turnover, 168 documents, 30–31 Investment bankers, 22–47, 329, recruiting and other firm-building 350–354, 356–360 activities, 32 candidate requirements, 350–354 , overview of, 7–22, communication skills and 47–53 personality, 354 banks, types of, 16–20 intellectual ability and analytical boutique, 17–20 skills, 353 bulge bracket, 16–17 interest in being an investment frequently asked questions, 47–53 banker, 352–353 investment banking division, prior achievement, 350–352 structure of, 20–22 technical knowledge, 353–354 industry groups, 21–22 exit opportunities, 45–47 product groups, 20–21 analysts, 46 pitching, 11–16 associates, 46–47 introductory, 11–12 senior bankers, 47 pitchbooks, 12–16

bindex.indd 417 3/4/2013 7:21:27 PM 418 index

Investment banking, overview of, overview of, 324 (continued ) cyclicality of activity, 330 targeted, 12 investment bankers, role of, 329 untargeted, 12 leverage, 324–326 winning, 16 , 326–328 transactions, types of, 8–11 targets, 329–330 capital raisings, 9–10 valuation, 244 leveraged buyouts (LBOs), 8 Liabilities, 72–74 mergers and acquisitions (M&A), current, 73–74 8 accounts payable (AP), 73–74 restructuring, 10–11 accrued expenses, 74 Investment banks, 2–7, 107 long-term debt, current portion key divisions, 3–7 of, 73 asset management and private notes and other short-term debt banking, 7 payable to banks, 73 investment banking, 3–4 noncurrent, 74 , 5 capitalized long-term leases, 74 sales and trading, 4–5 long-term debt, 74 sell-side research, 5–7 retirement obligations, 74 Liquidation value, 244–245 L Long-term debt, 74 LBO valuation, 345–347 analysis, 346–347 M required assumptions, 345–346 Management presentations, 307 debt, amount raised in Managerial accounting, 57 transaction, 345 Managing directors, 27–28, 45 exit multiple, 345 compensation, 45 ’s required IRR, exit opportunities for, 47 346 Market value of equity (MVE), time until exit, 346 182–183, 186, 203 League tables, 13–14 Merger of equals, 300 Leases Merger model, full-blown, 319 capital, 77–78 Mergers and acquisitions (M&A), 8, capitalized long-term, 74 293–322 operating, 77 acquisition rationales, 294–299 Lehman Brothers, 17 stated reasons, 294–296 Leverage ratios, 165–166, 344 unstated reasons, 297–299 Leveraged buyouts (LBOs), 8, 244, mechanics of, 299–302 323–348 asset purchase, 301–302 conclusions, 347–348 merger, 299–300 modeling, 331–347 , 300–301 analysis, 340–347 process, 302–321 pro forma balance sheet, 336–338 buy-side, role of investment purchase and exit assumptions, bankers on, 309–321 332–333 investment bankers on buy-side sources and uses, 333–336 deal, role of, 309–321

bindex.indd 418 3/4/2013 7:21:27 PM Index 419

sell-side, 303–308 Options, valuing, 141–144 Modigliani-Miller theorem, 126, 227 Black-Scholes formula, 143–144 Morgan, J.P., 17, 23 , 17 Multiple of investment (MOI) analysis, P 341 Pension funds, 106 Multiples Perpetuity, 112–113 analyzing and applying, 217–218 with growth, present value of, 113 deal dynamics, 218 present value of, 112–113 market conditions, 218 Pitching, 11–16, 304 transaction rationale, 218 introductory, 11–12 valuation, calculating, 214–217 pitchbooks, 12–16 control premium, 216–217 bios, 15 purchase price, 214–216 credentials and experience, 13 Mutual funds, 107 league tables, 13–14 potential buyers/investors/targets, N 15 Net income, 66–67, 162–163 situation overview/market margin, 162–163 overview, 14 Net present value (NPV) analysis, 117, strategic alternatives, 14 119–121 summary/conclusions, 15 Net working capital, 76 valuation, 14–15 Networking and informational targeted, 12 interviews, 368–375 untargeted, 12 headhunters, 374–375 winning, 16 informational interviews, 373–374 Precedent transaction methodology, recruiting receptions, 369–371 210–218 goals of, 370–371 analyzing and applying multiples, tips for, 371 217–218 reaching out to bankers and deal dynamics, 218 networking, 372–373 market conditions, 218 who to contact, 372–373 transaction rationale, 218 Noncontrolling interest, 81, 193–194 calculating valuation multiples, “Normalizing” financials, 174–177 214–217 adjustments, sources for finding, control premium, 216–217 175–176 purchase price, 214–216 income statement, adjusting, selecting acquisition comps, 211–212 176–177 criteria for, 211–212 non-recurring items, 174 sources for, 211 Notes and other short-term debt spreading and normalizing payable to banks, 73 acquisition comps, 212–214 Prepaid expenses, 71 O Private banking, 7 On campus recruiting (OCR), 357–358 Private client services (PCS), 7 Operating income (EBIT), 62–63 Private equity, 326–328 Operating vs. non-operating items, 64–65 Private wealth management (PWM), 7

bindex.indd 419 3/4/2013 7:21:27 PM 420 index

Pro forma balance sheet, 336–340 intellectual ability and analytical balancing, 338 skills, 353 cash, 337 interest in being an investment deferred financing fees, 337 banker, 352–353 example, 339–340 prior achievement, 350–352 existing debt, 338 technical knowledge, 353–354 goodwill, 337–338 cover letters, 367–368 new debt, 338 common mistakes, 368 new equity, 338 conclusions, 403 Pro forma ownership structure, 317 interviewing, 375–398 Product groups, 20–21 after the interview, 396–398 Profitability ratios (margins), 161–163 brainteasers, 394–396 EBIT margin (operating income general tips for, 377 margin), 162 preparing for, 376 EBITDA margin, 162 scheduling, 376–377 gross profit margin, 161–162 technical interview questions, net income margin, 162–163 390–394 other metrics as percentage of networking and informational revenue, 163 interviews, 368–375 Property, plant, and equipment (PP&E), headhunters, 374–375 71–72, 85 informational interviews, Proprietary trading, 5 373–374 Proxy statement (SEC Schedule 14-A), recruiting receptions, 369–371 150–151 reaching out to bankers and Purchase and exit assumptions, in LBO networking, 372–373 modeling, 332–333 receiving an offer and being a exit assumptions, 333 banker, 398–403 purchase assumptions, 332–333 multiple offers, selecting among, 399–403 Q recruiting process, 354–360 Quarterly report (SEC Schedule 10-Q), for full-time positions, 356–360 150 off-cycle internships, 356 cover, 155 summer internships, 355–356 exhibits, list of, 156 resumes, 360–367 financial statements, 155–156 creating, 362–366 footnotes to, 156 knowing, 366–367 management’s discussion and Replacement value, 244 analysis (MD&A), 156 Research analysts, 5–7 Restructuring, 10–11 R Resumes, 360–367 Ratio analysis, 159–160 creating, 362–366 Recruiting, interviewing, and landing education, 363 the job, 349–403 formatting, 362 candidate requirements, 350–354 skills, interests, and other, communication skills and 365–366 personality, 354 work experience, 364–365

bindex.indd 420 3/4/2013 7:21:27 PM Index 421

knowing, 366–367 interest rates, 134–136 Retained earnings, 75 valuing, 131–134 Retirement obligations, 74 yields, 136–138 Return ratios, 163–165 options and warrants, 141–144 return on assets (ROA), 164 call options, 141–144 return on equity (ROE), 164 warrants, 144 return on invested capital (ROIC), , 139–141 164–165 dividend discount model, Revenue, 61 140–141 Risk-free rate, 111, 225 Sell-side research, 5–7 Risk premium, 111 Selling, general and administrative Risk and reward, 109–110 (SG&A) expenses, 62 Senior vice president (SVP)/director, 27 S exit opportunities for, 47 Sales and trading, 4–5 Sensitivity analysis, 317–318 Savers, 102 Specialty finance companies, 104–105 SEC filings, 148–156 Sponsor’s equity, 336 “A” (Amendment), 152 Statement of cash flows, 83–87, 90–99 Schedule 6-K (current report, foreign example, 86 company), 152 from financing activities, 85–86 Schedule 8-K (current report), 150 from investing activities, 85 Schedule 10-K (annual report), from operating activities, 84–85 149–150, 152–155 Stocks cover, 152–153 convertible preferred, 204–205 exhibits, list of, 154–155 par value of, 75 financial statements, 154 valuing, 139–141 general business overview, 153 dividend discount model, 140 management’s discussion and Sum of the parts valuation, 244 analysis (MD&A), 153–154 Synergies, 295–296, 298 Schedule 10-Q (quarterly report), 150 T cover, 155 Tax accounting, 56–57 exhibits, list of, 156 Tax expense, 66 financial statements, 155–156 Teaser, 306 management’s discussion and Tender offers, 300–301 analysis (MD&A), 156 Terminal value, forecasting, 221–223 Schedule 13-D, 151 Time periods, analyzing, 169–173 Schedule 13-G, 151 calendarization, 171–173 Schedule 14-A (proxy statement), fiscal quarter, 169–170 150–151 fiscal year, 169 Schedule 20-F, 152 last twelve months (LTM) Schedule S-1, 151 170–171 Schedule S-4, 151 year-to-date (YTD), 170 Securities, valuing, 130–144 Time value of money, 108–109 bonds, 130–139 Total enterprise value, calculating, duration, 138–139 202–203

bindex.indd 421 3/4/2013 7:21:27 PM 422 index

Transaction comps, See Acquisition multiples and relative value, comps 189–194 Treasury stock, 75 comparing types of multiples, 191–193 U equity multiples, 191 UBS, 17 noncontrolling interest, 193–194 operating multiples, 190–191 V precedent transaction methodology, Valuation, 179–246 210–218 comparable company methodology, analyzing and applying multiples, 194–210 217–218 analyzing and applying multiples, calculating valuation multiples, 205–210 214–217 calculating multiples, 202–205 selecting acquisition comps, normalizing the financials, 201 211–212 selecting comps, 195–199 spreading and normalizing spreading comps, 199–201 acquisition comps, 212–214 conclusions, 238–245 Vice president (VP), 25–27, 45 additional methodologies, compensation, 45 243–245 exit opportunities for, 47 equity value, estimating, 240–241 W public company vs. private Warrants, valuing, 144 company, considerations for Weighted average cost of capital valuing, 241–243 (WACC), estimating, 223–232 discounted cash flow (DCF) analysis, capital structure, assuming, 231 219–238 cost of debt, 229–232 conclusions, 237 cost of equity, 224–228, 232 discounting cash flows and adjust beta for size, 232 terminal value, 232–235 adjusting for company-specific free cash flow, forecasting, risk premium, 232 219–221 beta, estimating, 226–228 sensitivity analysis, running, capital asset pricing model 235–237 (CAPM), 224–226 terminal value, forecasting, cost of preferred, 230–231 221–223 weighted average cost of capital Y (WACC), estimating, 223–232 Yields, bond, 136–138 enterprise value, 182–189 to call, 138 examples, 188–189 current, 138 formula, 185–188 to maturity, 137–138 (LBO), 345–347 to worst, 138 analysis, 346–347 required assumptions, 345–346 Z methodologies, primary, 181–182 Zero-coupon bonds, 132–134

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