The Comparison and Contrast of DCF and CAPM. The definition of Discount Cash Flow is uses of future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value‚ which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment‚ the opportunity may be a good one. The Discount Cash Flow shows that changes in long-term growth rates have
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H.E BUTT GROCERY COMPANY The New Digital Strategy ; A Leader in ECR Implementation SITUATIONAL STATEMENT In the year 2000‚ the internet was emerging as a new distribution channel that would transform the grocery industry by providing a powerful communications network for the direct sale of groceries to the consumer. The internet was also a promising tool for the way that business to business transactions would take place. There were new opportunities to gain efficiencies in the supply chain
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Accounting Education: an international journal Vol. 15‚ No. 1‚ 3 –10‚ March 2006 Why DCF Capital Budgeting is Bad for Business and Why Business Schools Should Stop Teaching it RALPH W. ADLER University of Otago‚ New Zealand Introduction As educators‚ we are constantly making decisions about course content. Each year‚ as we begin our preparations for writing our new or updated course outlines‚ such questions as what topics to include‚ modify‚ or exclude‚ are contemplated and re-contemplated
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How To Choose The Best Stock Valuation Method When trying to figure out which valuation method to use to value a stock for the first time‚ most investors will quickly discover the overwhelming number of valuation techniques available to them today. There are the simple to use ones‚ such as the comparable method‚ and there are the more involved methods‚ such as the discounted cash flow model. Which one should you use? Unfortunately‚ there is no one method that is best suited for every situation.
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13. Relative Valuation - Using Market Comparables Zenu Sharma zenu.sharma@edhec.edu Course Road Map 1. Financial Markets and Management 2. Present Value 3. Introduction to Risk and Return 4. Portfolio Selection 5. The Capital Asset Pricing Model 6. Financing and Capital Structure 7. Interest Rates and the Valuation of Bonds 8. Project Appraisal 9. Capital Budgeting 10. Capital Budgeting with Financial Leverage 11. The Valuation of Companies and Stocks 12. Relative Valuation 13. Options and
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Valuation models Discounted cash flow models: Dividend discount Free cash flow to the firm Residual income Multiples-based valuation: Price-earnings Value-EBITDA Value-EBIT Value-Sales Price-Book value Equity valuation In conjunction with the valuation of Coles Group‚ contained in “Excel03 Equity valuation” Real options valuation Equity markets price shares above the present value of expected future cash flows‚ due to the presence of embedded options not captured by DCF analysis Real
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Equity Valuation: Discounted Cash Flow and Residual Income Models Introduction Valuation plays a very important role when companies are trying to increase their value‚ raise money‚ acquire another firm or sell a subsidiary‚ also when a company decides to go public. Managers‚ investors and shareholders need to have the most accurate and reliable information in order to make decisions‚ that is why valuation is a fundamental exercise in corporate finance. It is pretty evident that whatever
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analysis of a publicly traded company‚ Intel Corporation. A discussion about the financial health of Intel has the ultimate goal of making recommendations to other investors. Horizontal analysis facilitates the required data for calculating certain ratios. In addition‚ this paper reports the negative and positive trends seen in Intel’s financial history as well as calculates the current ratio‚ quick ratio and cash to current liabilities ratio. Company Overview Intel Corporation‚ located in Santa Clara
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DCF Modeling Copyright 2008 © by Wall Street Prep‚ Inc. ***************************** SAMPLE PAGES FROM TUTORIAL GUIDE ***************************** Table of contents SECTION 1: OVERVIEW DCF in theory and in practice Unlevered vs. levered DCF SECTION 2: MODELING THE DCF Modeling unlevered free cash flows Discounting to reflect stub year and mid-year adjustment Terminal value using growth in perpetuity approach Terminal value using exit multiple approach Calculating net debt Shares outstanding
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BRAND MANAGEMENT Case No. 1 INTEL: BUILDING A TECHNOLOGY BRAND INTRODUCTION Intel’s corporate branding strategy‚ which many credit for the company’s unparalleled success in the microprocessor industry during the 1990s‚ stemmed from a court decision. On March 1‚ 1991‚ District Judge William Ingram ruled that the “386” designation used by Intel for its microprocessor family was a generic description and could not be trademarked. Intel had been confident that the judge would rule in its favor
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