of value. • Discounted future dividends, cash flows, and abnormal earnings may be used to estimate value. • Price-based multiples may also be used as value estimates. • No method by itself dominates any of the others. Copyright (c) 2008 Thomson South-Western, a part of the Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter 7: Prospective Analysis: Valuation Theory and Concepts Palepu & Healy Discounted Dividends Valuation
Words: 978 - Pages: 4
rP os t 9-206-095 REV: OCTOBER 31, 2006 ROBIN GREENWOOD LUCY WHITE Introduction to Valuation Multiples Table 1 op yo A multiple is a market price per unit, which, when multiplied by the number of units, gives the value of those units. We use multiples regularly in our everyday lives without even realizing it. For example, to determine the value of a bag of fish, we multiply the price of fish per pound (the multiple) by the weight of fish in the bag (the number of units)
Words: 2454 - Pages: 10
Approaches to Valuation___________________________ 11 2.1 Profitable Approach_____________________________________ 12 2.1.2 Income capitalization approach __________________________ 12 2.1.3Method of discounted cash flows__________________________ 14 2.1.4 Discounted Cash Flow Valuation on example of JSC NLMK____ 20 2.2 Relative Valuation Approach______________________________ 23 Conclusion _______________________________________________ 28 Bibliography ______________________________________________
Words: 8836 - Pages: 36
value (discounted cash flow valuation) 2. Relative valuation (comparables/multiples valuation) * Intrinsic value (DCF) - This approach is the more academically respected approach. The DCF says that the value of a productive asset equals the present value of its cash flows. The answer should run along the line of “project free cash flows for 5-20 years, depending on the availability and reliability of information, and then calculate a terminal value. Discount both the free cash flow projections
Words: 1324 - Pages: 6
CAPITAL BUDGETING PROCESS HSM 340 3/30/12 Organizations that decide to issue bonds generally have six steps to go through. Let’s discuss them. The first step is for the issuer to select bond counsel and the underwriter or financial advisor. The issuer and the solicitor work with these participants to structure the financing. Some basic questions need to be answered: (1) what is the purpose of the issue -- to fund a capital project, to refund prior debt, or a combination of both (2) what
Words: 2477 - Pages: 10
Capital Budgeting Process These are the six steps that organizations use when they are issuing bonds. These steps are: 1. The healthcare provider plans and prepares for the issuance process. (Cleverley, Chapter 21) 2. The healthcare provider gets evaluated by a credit rating agency. (Cleverley, Chapter 21) 3. The bond is rated by a bond rating agency. (Cleverley, Chapter 21) 4. The healthcare provider provides a note or lease to the governmental authority, the issuer of the bonds, via a trustee
Words: 925 - Pages: 4
of the free cash flow (FCF) and terminal value (TV) of the business.The business valuation calculation for Alex an Ani show that the company is profitable and estimates for the company include the present value of the free cash flow (FCF) from the 5-year revenue and earnings forecast and the present value of the terminal value (TV) based on the free cash flow (FCF) in the fifth year using the cost of capital. The combination of present values from discounted cash flows and discounted terminal values
Words: 1014 - Pages: 5
Case Project Case # 1: Valuation “ Mercury Athletic Footwear : Valuing the Opportunity” FIN 321 Dr. Ghosh Edward Pinela Adriana Nava Kristie Tillett Grace Tung Zhibin Yang Mercury Athletic Footwear 1. Is Mercury an appropriate target for AGI? Why or why not? There is sufficient evidence to suggest it will be advantageous for AGI to acquire Mercury Athletics. Factored into the decision is the lack of information on the work culture both firms currently possess.
Words: 1258 - Pages: 6
| | |Methods of Valuation for Mergers and Acquisitions: Arcadian Microarray Technologies, Inc. | |Written Case Analysis | Methods of Valuation for Mergers and Acquisitions: Arcadian Microarray Technologies, Inc. Case Summary The case is about a private
Words: 3013 - Pages: 13
Define the issues Infosys is facing. 1. Productivity Infosys’ productivity seems to be competitive compared to U.S. companies on a productivity measurement based on operating profit. Nevertheless, the company performs far behind when looking at revenue per employee. This phenomenon occurs to the whole country, causing the wage differential between India and the United States to be quite significant. [pic] [pic] The solution for Infosys’ performance improvement is
Words: 4330 - Pages: 18
