(1) Choose a company by your own preferably with international operations among those listed in LSE or...
Question:
(1) Choose a company by your own preferably with international operations among those listed in LSE or any other stock exchange. Make sure the company has financial statement and price data for at least five years. You can now start writing the company background section of your coursework. Describe why you are valuing this company and give a good analysis of the company background with reference to its past performance, industry, economy, business nature, cash holding, financial health, etc.
(2) Calculate the cost of equity and the weighted average cost of capital for firm valuation by using different assumptions. Make sure you discuss the choice of estimation periods and processes you used for the risk-free rate, market premium, beta, cost of equity, cost of debt and the capital structure of the firm.
(3) Calculate cash flows to the firm and cash flows to equity using different assumptions
(4) Calculate future cash flows using different estimates of growth rates for cash flows. Describe and justify your choice.
(5) Calculate the value of the firm relative to its home-country or international peers.
(6) Calculate the value of the firm and the value of equity under different assumptions. Decide what the value of the company is and how you use this for decision making. Discuss the advantages and the disadvantages of the approach you had in this valuation process.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill