stock valuation

stock valuation - Stock Valuation Stock valuation in this...

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Stock Valuation
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Stock valuation in this class There are several ways to evaluate companies. In this class we will focus on one, called Enterprise Discounted Cash Flow Model (EDCFM) ( also called Fundamental Stock Valuation) . This is the model you will need to use in the second part of the project to estimate the stock value of your companies. This model assume that your company will maintain the same target debt/equity ratio in the years to come.
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Important: The following slides complement the hand-out containing the instructions for Part 2 of the Project. Use these slides as a guide when working on the project
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EDCFM ) 1. Estimate future free cash flows (either 5 or 10 years) 2. Get a continuing value after the 5 (10) years using the growing perpetuity formula 3. Get the equity beta 4. Calculate the cost of equity using the equity beta 5. Calculate the cost of debt and calculate WACC 6. Discount future cash flows with WACC 7. Remove value of debt from the result to find market
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This note was uploaded on 03/19/2011 for the course ACCT 440 taught by Professor Smith during the Spring '11 term at Saginaw Valley.

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stock valuation - Stock Valuation Stock valuation in this...

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