Studies in Finance Session 2 Comparator Analysis “Comps” An opinion of value • A valuation is a well-founded opinion of value. It should be based on market evidence, but it is not a market result itself. • In some cases, the asset is not traded in an active market or exchange. e.g., privately held companies, real estate. Here, the concept of value may be different, depending on the type of valuation. (e.g., valuation for tax vs valuation for listing) • In other cases, the asset is
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code. While difficult, the value of these assests can be accurately calculated via a number of industry accepted methodologies. The key to a successful analysis is to develop a comprehensive plan of action. The initial point to determine when attempting to value intellectual propery or intangible assests is the rationale for undertaking the analysis in the first place. Why do you need to know the value of the assets? The most obvious situations are those in which a third party has an interest in the
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Valuation is the estimation of an asset’s value, whether real or financial, based on variables perceived to be related to future investment returns, on comparison with similar assets, or, when relevant, on estimates of immediate liquidation proceeds (Pinto, Henry, Robinson, Stowe; 2010). Correct valuation of real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise. This case attempts
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You will select a firm/stock and perform a Valuation and Investment Analysis. You must select one of the companies that you contributed to your team portfolio (ORACLE CORPORATION). You will make a recommendation based on your complete analysis. Your analysis should include (but is not limited to): 1. Your recommendation and 1 year target price. 2. An explanation of the key inputs and assumptions that support your financial analysis (such as industry and market share trends, end market
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Case analysis: Classification of instruments in fair value hierarchy Instrumental 1 In the case, there was a significant decrease in the volume and activity for the instrument because of (1) significant widening of the bid-ask spreads in the markets and the widening continued throughout Q4 2012 (2) a significant decrease in the volume of trades comparing with historical level in Q4 (3) no recent transactions. According to 820-10-35-54-c, it was reasonable to determine that market is not active
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INTRODUCTION To value the business we need to forecast some or all of the following depending upon which model of valuation we intend to use: dividends, future free cash flows, earnings per share, EVA which itself requires NOPAT and the Balance Sheet. Note that even if we are interested in cash flows we will usually forecast these using the indirect method rather than the direct method because the basic building blocks of profitability, growth, investment and financing are more readily framed in
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Valuation of Intellectual Property: Approaches We have moved into an information age characterized by increasing competition and shorter product life cycles; companies are more dependent on their intellectual properties (IP), as it has being recognized as a Valuable Business Asset. The Value of IP is much different & Valuation is much difficult than the value of any other assets. IP is creation of Human mind but to know the value or to trade that property we have to “value” them. The three main
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the case didn’t provide us with the financial statements for Monmouth, we can assume that in order to complete the acquisition they have to issue stocks as they exhausted (or will pretty soon exhaust) their debt capacity. 2. Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1, the average beta of comparable firms and the coupon rate to be 7.96%, the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson, lower than the
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b. The valuation technique used by FFC c. The classification in the fair value hierarchy for each input into the fair value measurement and how these classifications affects classification in the fair value hierarchy of the entire instrument. We will answer these questions by each instrument separately: First, Collateralized Debt Obligation (CDO) Before September30th, 2010, FFC was in an active market, and it determined the fair value of the CDO by using a market-based valuation technique
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r = 10% PMT = $500.00 FV = 0 PV = PV = $1,243.43 b. to get future value: n = 3 r = ? PV = 0 r = 10% PMT = $500.00 FV = ? FV= FV = $1,655 Chapter 5 A1. (Bond valuation) A $1,000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bond’s coupon rate is 7.4%. What is the fair value of this bond? Calculating PV factor i= required return = 9% = 0.09 n= 10 years
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