The Looming Future of Boston Beer Craft Beer vs. Domestic Producers The major domestic producer segment only contained three major companies also known as “The Big Three”: Anheuser-Busch‚ Miller Brewing Company‚ and Adolf Coors Company. They commonly competed on the foundation of economies of scale which wound up being the main driver of revenue. By selling significant quantities of product at a cheap price‚ “The Big Three” was able to obtain 77% of the market share in 1994. By holding such a
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where‚ Cash inflows = Cash Outflows * Usually expressed in years It really considers the flow of cash into the business and outside the business Decision Rule: A project is good if PBP is either equal or lower than the target period But PBP is not adequate on its own as an investment appraisal technique. Example Project P Project Q $ $ Capital investment 60‚000 60‚000 Profits before depreciation (a rough approximation of cash flows) Year
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References: • CAPITALINE software • www.moneycontrol.com • www.investopedia.com • www.asianpaints.com • Book: Business Analysis and Valuation using Financial Statements- by Palepu‚ Healy‚ Bernard
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efficient market is defined as a market where competition among investors should work to eliminate all positive-NPV trading opportunities or‚ equivalently‚ that securities with equivalent risk should have the same expected return based on their future cash flows‚ given all information that is available to investors. Definition of arbitrage: It is known as the practice of buying the low-priced goods and selling them at higher prices in different markets or in different forms to gain the guaranteed profit
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obligation.” The “+” in the BBB+ indicates that the long-term credit rating (6 months to 24 months) may be raised.1 Stock Price Movement The graph shows the stock price movement of Infosys over the past one year.2 STOCK PRICE VALUATION Discounted Cash Flow Method (DCF) Method WACC Calculation WACC = (Cost of Equity) (E / E+D) + (Cost of Debt) (1 - Tax Rate) (D / E+D) Risk-free Rate (India) 3 month Treasury Bill Rate3 8.18% NOT USED for WACC 10 year Long Term Treasury Bond Rate4
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with an attractive valuation? - The investment merits should be preferably unique - When highlighting these merits try to mention how your expectations differ from that of the commonality! ) 1 4) Discuss the industry – Form a basis for your decision ( Helps to make you position clear: - Market analysis‚ - Environment analysis‚ - Strategy development‚ - etc. ) 5) Give your valuation argument. Use comparable Multiples (financial metrics/company valuations) and DCFs where appropriate
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telecommunications company which is also among the largest telecommunications companies in Europe. If this come true‚ it will become the largest hostile takeover in the world. But now we are facing one of the biggest problems during this process---valuation of Mannesmann. After our discussion‚ we decide to use the DCF method with the information provided in Exhibit 7 and some reasonable assumptions we made about Mannesmann’s future situation. As a result‚ we found that the value of Mannesmann is € 175
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Rate of Return and Loan Tables 1.4 Multiple Internal Rates of Return 1.5 Flat Payment Schedules 1.6 Future Values and Applications 1.7 A Pension Problem—Complicating the Future-Value Problem 1.8 Continuous Compounding 1.9 Discounting Using Dated Cash Flows Exercises Calculating the Cost of Capital 2.1 Overview 2.2 The Gordon Dividend Model 2.3 Adjusting
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the Metapath shareholders if the board accepts the RSC offer? Even though the company has only one quarter has only projected its activity one quarter forward‚ is it possible to assess the reasonableness of the valuation? (For those brave enough to attempt to a discounted cash flow valuation‚ the ten year Treasury rate in September 1997 was 6.21%.) 3. Is the Celltech offer a reasonable offer? How should the Metapath board view the Celltech stock? What are the risks for the Metapath shareholders if
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these same actions? Week 2 DQ 1 The annual report is agood place to for managers to start in the assessment of the companys future and future oopertions. The annual reports usuallly includes the income statement‚ balance sheet‚ statement of cash flow and
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