Multiples (or Relative) Valuation Method Calvin Brewery Group (CBG) is an international brewing group with products in many countries. Your task is to value CBG at the end of 2018. You are told that Heinekens earnings per share in 2018 is 1.458 euros. You also know that the average price/earnings ratio in CBGs industry (Alcohol/Beverages) is 23.95. 1) What is stock price of CBG at the end of 1998 based on the multiple valuation method? 2) What are potential weaknesses of this valuation method?

2) Enterprise DCF Valuation Method CBG was listed with 313.9M shares in 2018. It had 1,056M of debt, and 1,310M invested in financial assets unrelated to its operation. The free cash flow is estimated to be as follows in each of the next 10 years. The continuation value (CV) capturing the cash flow value after 2029 is 6744M as of year 2028. Forecast Year 1 2 3 4 5 6 7 8 9 10 Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Free Cash Flow (m) 301 307 311 316 321 326 330 335 340 345 Continuing Value (m) 6744 5 a) The discount rate r = 6.7% reflects the risk of its cash flow. How much should you pay for one share at the end of 2018? b) Show how you can derive the continuing value used in part a) based on the assumption that free cash flow grows at 1.5% per year after 2028. 3) Dividend Discount Model Valuation Method CBGs cost of equity r is given as 6.9%. Its 1998 dividend is 0.25 euros and dividends are forecast to grow at 6%. Value the company using the dividend discount model from the perspective of the end of 2018.