4 million. 4. Free Cash Flow for 2011 is obtained through NOPAT less – Investment in Capital = $65.16 – ($532.4 - $502.2) = $65.16 - $30.2 = $34.96 million is the Free Cash Flow as of 12/31/2011. B. Page 547 of the text states that terminal‚ or horizon‚ value is the value of operations at the end of the explicit forecast period. It is also called the continuing value‚ and it is equal to the present value of all free cash flows beyond the forecast period‚ discounted back to the end of the forecast
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Since 1872 Khakis ‘R Us Valuation MBA Investment Bankers LLC January‚ 2014 Executive Summary • Evaluation of NYC Capital Offer — Comparable Companies Analysis $24.64-$32.90 — Precedent Transaction Analysis $21.99-$30.43 — Discounted Cash Flow Analysis $25.03-$33.74 • Recommendations — Counteroffer $20/share + Earnout of 75% EBITDA over 3 years $25.18-$30.03 — Defensive Strategy Shareholder Rights Plan + Buyback — One Year From Now About Boots‚ Valuation Range Khakis
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Write a 1‚050- to 1‚750-word paper in which you justify the current market price of the organization’s debt‚ if any‚ and equity‚ using various capital valuation models. Complete the following in your paper: • Show calculations that support your findings‚ including those involving rates of return. • Defend which valuation model best supports your findings. Capital
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marks (6 questions x 5 marks each) ANSWER ALL QUESTIONS DISCUSS FULLY THE VALIDITY OF EACH OF THE FOLLOWING STATEMENTS. 1. “If the current stock price were greater than P 0 = Div 1 + P 1 (1 + r e ) we would expect investors to rush in and buy it‚ driving up the stocks price.” The valuation model above calculates a stock’s current price by finding the
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investment√. Non-discounted cash flow method means that the cash flows will not be discounted‚ that is‚ the present value concept is not applied√. Timing of the cash flows does not make any difference to the evaluation√. Discounted cash flow means that cash inflows and cash outflows will be discounted according to the time value of money concept√. Different timing of returns will give different values. Two examples: Non-discounted cash flow; Payback period and ARR√√ Discounted cash flows; NPV‚ IRR discounted
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The purpose of DCF-Valuation is to determine the value of a company in terms of its future cash flows. The cash flows are adjusted with certain items (e.g. those not related to company´s core businesses or those with no cash effect) in order to make sure the flows reflect the actually generated cash as good as possible. This document describes DCF valuation in detail and in our valuation model. If you would like to get an overview of valuation in general or practical examples (numerical and graphical)
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Methods of Corporate Valuation Prof. Ian H. Giddy‚ New York University | What is my company worth? What are the ratios used by analysts to determine whether a stock is undervalued or overvalued? How valid is the discounted present value approach? How can one value a company as a going concern‚ and how does this change in the context of a potential acquisition‚ or when the company faces financial stress? Finding a value for a company is no easy task -- but doing so is an essential component
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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 1 20‚000 50‚000 Year2 30
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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. The prospective value (price) of the subject firm is quantified
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capbudg.xls: This program allows you to do a basic capital budgeting analysis for a project‚ and compute NPV‚ IRR and ROI. (For Macintosh version) 2. risk.xls: This program allows you to use past returns on a stock and a market index to analyse its price performance (Jensen’s Alpha)‚ its sensitivity to market movements (Beta) and the proportion of its risk that can be attributed to the market.(For Macintosh version) 3. capstru.xls: This program allows you to estimate an "Optimal" Capital structure
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