Parameters and Costs of Financing Chapter 9: Measuring Earnings Chapter 10: From Earnings to Cash Flows Chapter 11: Estimating Growth Chapter 12: Closure in Valuation: Estimating Terminal Value Chapter 13: Dividend Discount Models Chapter 14: Free Cashflow to Equity Models Chapter 15: Firm Valuation: Cost of Capital and APV Approaches Chapter 16: Estimating Equity Value Per Share Chapter 17: Fundamental Principles of Relative Valuation Chapter 18: Earnings Multiples Chapter 19: Book Value Multiples Chapter
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Chapter 12: Liabilities Suggested Time Case 12-1 Dry Clean Depot Limited 12-2 Darcy Limited 12-3 Homebake Incorporated Assignment 12-1 Liability issues 25 12-2 Liability recognition (W*) 25 12-3 Warranty 10 12-4 Estimated obligations 20 12-5 Liability measurement……………………….. 15 12-6 Measurement of estimated liabilities 20 12-7 Long-term note—borrower and lender 35 12-8 Note with below-market interest rate 35 12-9 Debt issuance‚ fair value
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sales and revenues for future years which in turn lead to assumed profit margins. There are three multiples in the case that can be taken into consideration to compare Crocs with other companies based upon. Price Earnings EV to EBITDA EV to Sales To compare based on Price Earnings (PE)‚ Crocs has $42.69 in trailing 1 in 2007 (Exhibit 6)‚ which is in the range of primarily apparel average‚ $44.06 (Exhibit 5). When comparing this ratio to the competing companies Zumiez is the closest at $44.49
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Acca Global web site: www2.accaglobal.com/archive/sa_oldarticles/39709 Milwaukee. (2011‚ October 12). PR NewsWire. Retrieved from PR NewsWire website: www.prnewswire.com/news-releases/johnson-controls-forecasts-44-billion-in-sales-with-double-digit-earnings-improvements-in-fiscal-2012-131579233.html#prettyphoto Peavler‚ R. (2011‚ October 20). Biz Finance. Retrieved from
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2. Yield Curve 7 (a)What is the yield curve? 7 Shape of the yield curve? 7 Factors that affect the slope of the yield curve 8 (b) Yield curve graph 10 3. Valuation of the shares for Lloyds Company 11 Valuation Methods 12 Earnings based method 12 Asset based method 12 Discounted Cash flow methods i.e. (free cash flow or Dividend valuation method) 13 4. Evaluation of stock value results 14 Asset-based approach 14 References 16 APPENDIX 17 Appendix 1 17 Appendix 2 18 INTRODUCTION Lloyds banking
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Discounted Cash Flow Techniques for Capital Project Evaluation A discounted cash flow analysis is an important tool in capital budgeting as a means of evaluating proposed projects and comparing the growth potential of cash flows. Relevant incremental cash flows must be considered along with the costs of the investment itself in order to determine if the project is to be accepted or rejected. The considerations for acceptance or rejection of a project or slate of projects are the net present value
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single model‚ discounted cash flow (DCF): PV= t=1TCt(1+r)t with PV = present value‚ Ct = forecasted incremental cash flow‚ t = project life‚ and r = the opportunity cash capital. The Gaps Myers argued that the gaps between strategic and financial analysis are caused by: * Finance theory and traditional approaches to strategic planning may be kept apart by differences in language and "culture." Managers worry about projects’ book rates of return or impacts on book earnings per share. They
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previous class. The next two pages review a few of the various ways to go about it. For a discounted CF approach of valuing Commercial Fixtures Inc.‚ I will use the following template: VALUATION APPROACHES – OVERVIEW/REVIEW 1. Comparable Trades Analysis — Using valuation ratios‚ or “multiples” of comparable firms Use one or more valuation ratios‚ which include (a) Price-Earnings (b) Market-Book (c) Price-CF (d) Price-Revenues (e) Enterprise Value to EBITDA‚ and (f) Other ratios
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318.09 | | B) | $52‚464.79 | | C) | $55‚211.16 | | D) | $58‚811.99 | | E) | $60‚923.52 | Question 5 (2 points) Shelley won a lottery and will receive $1‚000 a year for the next ten years. The value of her winnings today discounted at her discount rate is called which one of the following? Question 5 options: | A) | single amount | | B) | future value | | C) | present value | | D) | simple amount | | E) | compounded value | Question 6 (2 points)
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Net present value for the market value The actual value of a security‚ as opposed to its market price or book value. The intrinsic value includes other variables such as brand name‚ trademarks‚ and copyrights that are often dificult to calculate and sometimes not accurately reflected in the market price. One way to look at it is that the market capitalization is the price (i.e. what investors are willing to pay for the company) and intrinsic value is the value (i.e. what the company is really worth)
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