Homework answers / question archive / Firm and Stock Valuation Project  Objectives: 1

Firm and Stock Valuation Project  Objectives: 1

Finance

Share With

Firm and Stock Valuation Project 
Objectives: 1. Learn how to estimate firm value or enterprise value of a publicly traded company using different models. 2. Learn how to estimate equity value of a publicly traded company using different models. 3. Learn how to obtain information for the estimations. 4. Learn how to justify data choices. 
Requirements: 
Part 1: Estimate firm value and stock value  1. Use the same company as your cost of capital project. If you have a partner, choose one. Try not to use the same company as others. Choose an appropriate cost of equity and an appropriate cost of capital from the cost of capital project. 
2. Use Free Cash Flow (FCF) model with an abnormal growth assumption. a. Estimate firm value. b. Based on the estimated firm value, calculate share price. c. Note (a) an abnormal growth period, (b) growth rates and (c) data sources. 3. Use Free Cash Flow to Equity (FCFE) model with an abnormal growth assumption. a. Estimate share price. b. Based on the estimated share price, calculate firm value. c. Note (a) an abnormal growth period, (b) growth rates and (c) data sources. 
Part 2: Answer the following questions. Justification is required for all questions. Be very specific to your chosen company. You need to do research about your chosen company. Be careful of plagiarism. Note that your submission will be checked for plagiarism with Turnitln. If you'd like to check for yourself, you can submit a draft in the dropbox (you will see results) and resubmit a final in the same dropbox. a. What is an appropriate firm value or range of your chosen firm? b. If a competitor offers to buy your firm, what should be an acceptable minimum selling price? 
Submission: 1. One Excel file that shows all calculations/estimations and assumptions/justifications and data sources. 2. Word document for a write-up and screenshots of all data sources. Single-spaced text. 
Submit both files in Canvas. If you want to resubmit, upload both files again simultaneously. Only the last submission will be graded. Note that the drop box will not be monitored and hence messages in the drop box will not be read until the grading period. If you have questions/comments that need a response, please send e-mail directly to the instructor. 
For those of you who work with a partner, both of you need to join a group before submitting. See instructions in Canvas. 
Grading: 1. FCF model 35% 2. FCFE model 35% 3. Excel layout 10% 4. Part 2 20%