1. What valuations of the shares are suggested by an analysis of the financial statements using a discounted cash flow analysis (you will need to calculate the weighted average cost of capital), the dividend discount model, and a relative valuation?

(i) Derive the pro-forma income statement, pro-forma balance sheet, and cash flow sheet. [ 35 marks ]

(ii) Compute the weighted average cost of capital (WACC) for Neptune Orient Lines (NOL). [ 10 marks ]

(iii) From the pro-forma income statement and pro-forma balance sheet and cash flow calculations, perform a discounted cash flow (DCF) valuation. [ 15 marks ]

(iv) Perform also valuation using the dividend discount model (DDM).

[ 15 marks ]