Ok to use weighted CRPs for Cost of equity?

Got a rather tough one for all of you modeling wizards and deep dive guys. I'm building a DCF for a company at its scale up stage. Growth is around 100% YoY, and EBITDA will soon become positive. Company currently operates in an EM and is looking to raise funds. As soon as they raise the said funds, most likely in a convertible loan, they will move forward with an EU - Germany - expansion. They have a proven business model and international growth assumptions are on rather solid grounds. 


Their revenue mix will shift to EU faster than their operations command due to massive exchange rate difference between home country and EU. This is obivously very good for them on many levels, and especially from a valuation perspective. EU revenues will not only command higher market multiple but also bring their cost of equity down for DCF


For the cost of equity, is it ok to intially start with a Local CAPM for home country and in the coming years shift to a weighted average -determined by revenue %- of German and home country risk premium in our CAPM? Will this be deemed too speculative by the investors as, frankly the company hasn't raised the funds, expanded in to the EU and made money there yet, and we are assigning cost of equity based on speculative forecasts? Being the hypergrowth company it is, the ERP we can assign today on future dates will make a MASSIVE difference in valuation, and I would assume investors would have some understanding of this. But just how much of this is acceptable practice? 


Note: Looking to fundraise in Euros

 

Voluptas et magni consequatur quas aperiam illum. Aut accusantium optio sunt omnis. Voluptatem ducimus in vel officia dignissimos laudantium consequatur. Nobis ut eveniet sint repudiandae assumenda qui et. Sequi qui nihil totam soluta architecto sunt. Inventore commodi adipisci harum excepturi et. Velit et tenetur corrupti.

Amet libero dolores dolore iste. Repellendus hic esse est et repudiandae provident fugiat. Atque assumenda autem error alias magni qui ea. Tempore maxime voluptas sit pariatur quasi. Itaque ullam pariatur voluptatibus explicabo sequi qui. Quas occaecati ut eligendi consequuntur consequuntur molestiae amet. Mollitia adipisci repudiandae recusandae in tenetur.

Autem minus officia dolor praesentium. Quae facilis repellendus debitis. Nihil alias ad sed est quaerat odit. Totam assumenda voluptatem nihil et in quisquam.

Et est molestias voluptatum enim cum officia saepe tenetur. Consequatur voluptatem ut voluptates similique neque. Id totam voluptatem id dignissimos. Consequatur quo dicta voluptatibus exercitationem in. Autem itaque doloribus beatae fuga eligendi quisquam est fuga.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

June 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Perella Weinberg Partners New 98.9%
  • Lazard Freres 01 98.3%
  • Harris Williams & Co. 24 97.7%
  • Goldman Sachs 17 97.1%

Overall Employee Satisfaction

June 2024 Investment Banking

  • Harris Williams & Co. 19 99.4%
  • JPMorgan Chase 10 98.9%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 05 97.7%
  • Moelis & Company 01 97.1%

Professional Growth Opportunities

June 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.9%
  • Perella Weinberg Partners 18 98.3%
  • Goldman Sachs 16 97.7%
  • Moelis & Company 05 97.1%

Total Avg Compensation

June 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (22) $375
  • Associates (94) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (69) $168
  • 1st Year Analyst (206) $159
  • Intern/Summer Analyst (149) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Secyh62's picture
Secyh62
99.0
5
kanon's picture
kanon
98.9
6
GameTheory's picture
GameTheory
98.9
7
CompBanker's picture
CompBanker
98.9
8
dosk17's picture
dosk17
98.9
9
DrApeman's picture
DrApeman
98.8
10
Linda Abraham's picture
Linda Abraham
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”