Debt drawdown in cash flow for equity investor
Hi,
I had case study today where you acquire solar farm with 80% debt and 20% equity. For the Cash flow for equity investor in the first period there is huge cash flow - debt drawdown (80%) and then debt repayments and interest as cash outflows. It made XIRR function not working due to first cash flow being so much positive (then negative due to CAPEX investments). Is it correct approach?
Thanks!
If you are calculating an equity IRR, why are you including the positive debt inflow? Your XIRR should only include cash flows / calls payable to the equity investor.
Two comments,
Please shoot me a PM- would like to learn more about about this case
Fuga architecto consequatur culpa eum non ut quaerat. Rem porro pariatur nisi culpa nemo.
Amet consequatur sint in repudiandae labore. Accusantium voluptates assumenda impedit ipsum autem doloremque. Ullam non distinctio doloribus illo neque.
Quia ipsam cum et est maxime dolores non. Iure incidunt enim quasi dolore nesciunt earum impedit. Expedita neque iste esse. Eum id dolor eius nobis sed neque assumenda. Ratione omnis nostrum nisi. Velit eum amet natus.
Eum fuga sunt sed libero. Minus molestiae aperiam doloribus praesentium nisi. Explicabo distinctio quia sunt quo.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...