decided to value the WHC asset using a CAPV methodology. The reasons behind choosing this approach have been the following: 1. The debt is changing over time as it matures and hence the capital structure changes making a WACC unsuitable for the valuation 2. We believe that this methodology captures in a more correct way the present value of the ITS emerging from the leverage When applying the CAPV methodology we have had to consider a range of possible revenue growth and discount rate scenarios
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to do that‚ the main valuation methods and theories will be reviewed and consequently applied to deliver an investment recommendation regarding FY2012 stock price. The structure of this dissertation is divided into eight main sections: I. In the first section -executive summary- an equity research report will be presented summarizing Cimpor’s valuation as well as my final recommendation; II. In section two -literature review- I will start by explaining the main role of valuation and then discuss the
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them in this and subsequent courses. These principles are reflected in the capital-budgeting process. The basic idea is to view an investment project as a series of cash outflows and inflows over the life of the project. Once the 1 project’s cash flows have been fully identified‚ we adjust them to reflect how desirable these cash flows are in terms of timing and risk – this adjustment is called discounting – and add up the
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option to expand capacity (current full capacity will be reached in 2014) for $60 million and generate additional sales of 20% base sales in 2014‚ 30% in 2015‚ and 40% thereafter. The two companies tentatively agreed on a cash offer of $265 million. However‚ a discounted cash flow (DCF) analysis of the base acquisition and option will be performed along with a strategic and sensitivity analysis to help Sterling determine the value of the acquisition‚ the expansion option‚ and in combination. Sterling
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margins on R&D and related activities. FMI has funded these expenses through Notes Payable which are secured by its Accounts Receivable. It is projected that by the end of the current year‚ the company will have difficulty generating enough new cash flows to meet its growing sales. The company is facing the additional problem of having reached its current Notes Payables limit‚ set at 70% of Accounts Receivable. Management have resorted to
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financing and working capital management decisions. COURSE CONTENTS: This course provides basic concepts of the time value of money‚ valuation and rates of return‚ cost of capital and capital budgeting. Students will learn about how capital markets function‚ about different types of securities and financing instruments that exist‚ and about how to manage cash flows. Also‚ risk‚ working capital management‚ leverage‚ forecasting‚ and the analysis of financial statements and ratios are given with particular
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Resources is a fully integrated energy company with operations in E&P‚ Refining & Marketing (R&M) and Petrochemicals. Capital budgeting at Midland is done using discounted cash flow method and weighted average cost of capital (rwacc). Corporate Weighted Average Cost of Capital‚ rwacc The primary use of the corporate rwacc is valuation (TV=FCF/(rwacc-g)). While the rwacc may be used for evaluating internal projects‚ the usage will be incorrect owing to the fact that the risk-return profile‚ debt
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I. Executive Summary In May of 2000‚ Yeats Valves chairman and CEO‚ Bill Yeats‚ met with his consultant and fellow board member‚ Kate Porter‚ to discuss the final negotiations regarding the acquisition of Yeats Valves by TSE International Corporation. Although the social terms of the merger had been discussed‚ no specific details had been settled. Organized in 1980 for engineering and developmental work on specialty valves and heat exchangers‚ Yeats Valves and Controls Inc (YVC) had a reputation
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GENEVA BUSINESS SCHOOL Master of Science in Finance ********************* ASSIGNMENT Flinder Valves and Controls Inc. Case 43 Student: Nguyen Hoang Ngoc Anh Professor: Dr. John Heptonstall Subject: Strategy and Financial May 2011 NgocAnhNo1 1. Make a brief description of each company and its business activities . Flinder Valves and Control ( FVC) Flinder Valves and Control (FVC)‚ located in Southern California‚ was come from a small company organized in 1980 for engineering
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Nike Inc. – Cost of Capital & Stock Valuation Steven Seagal George Clooney Brad Pitt Background Nike Inc’s share price has declined considerably over the past few years and Kimi Ford‚ fund manager of NorthPoint Lager-Cap Fund‚ was considering investing in the stock. Nike was looking to revitalize itself by addressing both top-line growth and operating performance. The goal was to improve revenues that had plateaued‚ and increase profits that had decreased over the years. One
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