PAGINAS AMARALES VALUATION 08 Fall AFF5300 Case Studies in Finance- March 2013 Executive summary Juan Lopez‚ a new associated of JP Morgan’s Latin America M&A Group was given a responsibility to value the telephony directory businesses in Argentina‚ Brazil‚ and Chile of Paginas Amarelas. The aim of this report is to use the fundamental approach to help Lopez to estimate the value of these three units within Paginas Amarales. This analysis adopted the discount cash flow (DCF) approach. The
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updated version. 4 Class Materials • Class notes – Self contained: will do a brief review of concepts from Corporate Finance‚ having taken Valuation is useful but not required – Handouts in class‚ slides uploaded on NYU Classes – To see what’s next‚ check NYU Classes • No Required texts: – Useful textbooks for background reading • Investment Valuation 3rd Ed. by Damodaran • Brealey‚ Myers Allen • Ross Westerfield Jaffe – Articles and cases 5 Class Materials • HBS cases for detailed analysis
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2. What is the maximum price they could expect to pay Monmouth‚ based on an analysis of valuation using discounted cash flow‚ calculation of WACC and terminal value determination? 2. Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1‚ the average beta of comparable firms and the coupon rate to be 7.96%‚ the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson‚ lower than the $50 offered by Simmons to sell their
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Estimate the per-movie value of a portfolio of sequel rights such as Arundel proposes to buy. Use both a discounted cash flow (DCF) approach and an option valuation approach (such as Black-Scholes). • Per movie value of a portfolio of sequel rights by: o DCF approach = $4.88 M We obtained $4.88M through the DCF approach (Exhibit 1) by a taking a summation of all positive NPV sequels and dividing it by the total number of sequel rights available i
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FINS3625 APPLIED CORPORATE FINANCE Case Study Written Report Week 8 Valuation: Laura Martin Name Student Number % Contributio n 20 20 20 20 20 Signature Karen Chan Yifeng Chen (Nino) Tony Richardson Weitao Wu (Tony) Wendy (Wenyu) Yan z3242429 z3283995 z3253113 z3284666 z3241580 1 Multiples versus DCF analysis Multiples analysis is simple to understand and apply. The inputs for the multiple are publicly available‚ though are vulnerable to accounting manipulation. Also
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Question 5- What are the tradeoffs in using multiples versus the DCF analysis? Answer: DCF Valuation ; Martin forecast revenue for each year for from the firm’s financial data‚select appropriate discount rate based on WACC‚ discount each cashflow back to it present value‚ obtain the terminal value through an application of terminal value multiple‚ using DCF method‚ Martin calculates the price of Cox’s share to be $54.29. Multiple Valuation; Identify comparable firms that have growth‚ cashflow and risks
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risk premium inherent in equity investments like common stocks while Discounted Cash Flow or DCF compares the cost of an investment with the present value of future cash flows generated by the investment with the mindset being that if the cash flow is positive‚ then the investment is good. Generally speaking‚ CAPM is a model that describes the relationship between risk and expected return and DCF is a valuation method used to estimate the attractiveness of an investment opportunity. So what are the
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Executive Summary From our DCF calculations‚ the value of Torrington as a stand-alone entity is $1.181 billion. However‚ the maximum purchase price for Torrington should only be $641 million. The optimum debt amount for this transaction would be $301 million. This amount of debt would result in a total debt to capital ratio for Torrington of 47%‚ within the range for a BBB “investment grade” debt rating. The combined entities‚ Torrington-Timken‚ would produce an interest coverage ratio of 3.2‚
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that the best way to value cable stocks is through creative methods such as real options and not through more traditional or typical valuation methods such as EBITDA multiples‚ ROIC analysis and DCF analysis. In 1999 she presented at the Credit Suisse First Boston Broadband conference‚ where she wanted to portray the message that real options is a superior valuation technique for cable stocks. She also wanted to have the opportunity to demonstrate her knowledge of the drivers of value in the cable
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Feasibility Study on Carbonated Drinks I. Introduction An effervescent drink that releases carbon dioxide under conditions of normal atmospheric pressure. Carbonation may occur naturally in spring water that has absorbed carbon dioxide at high pressures underground. It can also be a byproduct of fermentation‚ such as beer and some wines. Many curative properties have been attributed to effervescent waters (e.g.‚ aiding digestion and calming nerves)‚ but few have been scientifically
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