wacc
2. What is the maximum price they could expect to pay Monmouth, based on an analysis of valuation using discounted cash flow, calculation of WACC and terminal value determination?
2.
Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1, the average beta of comparable firms and the coupon rate to be 7.96%, the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson, lower than the $50 offered by Simmons to sell their stocks but higher than the current market price of $30. As for the peer multiples, and due to the lack of information for the comparable companies we only managed to calculate the EBIAT multiple, the earnings multiple and the book value multiple using the three comparable companies, Actuant Corp, Snap On Inc., and Stanley Works. The result of the multiple valuation showed a fair price of $40.1 per share based on the EBIAT multiple and a value of $29.61 per share based on the earnings multiple. Both prices are below the fair price calculated by the DCF. Only the book value multiple exceeded the DCF fair value with a value of $65.25. The first two multiples failed to capture the future potential and growth of the corporation, where the DCF managed to include it as a factor in the calculations.
En base a la valoración DCF y usando un CCPP de 8.25 % ( la beta considera igual a 1 , la beta promedio de empresas comparables y la tasa de cupón de ser 7,96 %, la tasa para las empresas calificadas BB ) y una tasa de crecimiento del 5,5 %. El precio justo es de $ 40,4 por acción por Robertson , inferior a los $ 50 ofrecidos por Simmons para vender sus acciones, pero más alto que el precio actual de mercado de $ 30 . En cuanto a los múltiplos pares , y debido a la falta de información para las empresas comparables que solo conseguimos para calcular el múltiplo EBIAT , el múltiplo de beneficios y el múltiplo de valor libro usando las tres empresas comparables, Actuant Corp, Snap
2.
Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1, the average beta of comparable firms and the coupon rate to be 7.96%, the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson, lower than the $50 offered by Simmons to sell their stocks but higher than the current market price of $30. As for the peer multiples, and due to the lack of information for the comparable companies we only managed to calculate the EBIAT multiple, the earnings multiple and the book value multiple using the three comparable companies, Actuant Corp, Snap On Inc., and Stanley Works. The result of the multiple valuation showed a fair price of $40.1 per share based on the EBIAT multiple and a value of $29.61 per share based on the earnings multiple. Both prices are below the fair price calculated by the DCF. Only the book value multiple exceeded the DCF fair value with a value of $65.25. The first two multiples failed to capture the future potential and growth of the corporation, where the DCF managed to include it as a factor in the calculations.
En base a la valoración DCF y usando un CCPP de 8.25 % ( la beta considera igual a 1 , la beta promedio de empresas comparables y la tasa de cupón de ser 7,96 %, la tasa para las empresas calificadas BB ) y una tasa de crecimiento del 5,5 %. El precio justo es de $ 40,4 por acción por Robertson , inferior a los $ 50 ofrecidos por Simmons para vender sus acciones, pero más alto que el precio actual de mercado de $ 30 . En cuanto a los múltiplos pares , y debido a la falta de información para las empresas comparables que solo conseguimos para calcular el múltiplo EBIAT , el múltiplo de beneficios y el múltiplo de valor libro usando las tres empresas comparables, Actuant Corp, Snap