Trends emerging lately, including divestitures, spin-offs and class action suits, make an understanding of valuation of companies with on-going operations critical for a company's directors, but also for supervisors and for investors. Initially, the discounted cash flow method, which is used for valuation, is discussed in this note. It will first be a guide to managers of businesses in their own attempts to follow worth optimizing strategies; second, to portfolio managers and security analysts within their effort to find the true economic value of an organization and its equity; lastly, investment bankers will be guided in their advisory function of firms involved in merger transactions and restructuring.
This note will not demonstrate the way to value companies in financial distress; in such events, a contingent claims valuation will be proper. With the valuation of a Canadian business using real financial data, the discounted cash flow method is demonstrated.
Publication Date: 10/28/2005
This is just an excerpt. This case is about Finance
Related Case Solutions & Analyses:
Lockheed Tri Star
The Gold Story
Equity-Worthiness and Equity-Willingness: Key Factors In Private Equity Deals
Ratios Tell a Story 2007
Infineon Technologies: Time to Cash-in your Chips?
Suntech Power: Competition and Financing in China’s Solar Industry
Transfer Pricing at Cameco Corporation
Note on Pricing in Nonprofit Organizations
Hedging Currency Risk at TT Textiles
Phu My Hung
