Valuation for ZipCo Limited (4 marks): Apply three valuation models, i.e. residual income model, residual operating income
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Valuation for ZipCo Limited (4 marks):
- Apply three valuation models, i.e. residual income model, residual operating income model and free cash flow model, to estimate the intrinsic value of the company. Provide calculations and results of the valuation models in a table and include it as an appendix in the report.
- Compare and discuss the estimates obtained from the three models. Compare the estimates with the actual share price observed in the stock market when valuation is performed and conclude whether the firm is currently overvalued or undervalued.
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