CorporateValue - CorporateValue CorporateValue...

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Corporate Value FINC 3630 Yost Corporate Value Corporate Value What is the goal of the firm? Operating Assets vs. Nonoperating Assets The Corporate Valuation Model The Value of the Firm’s Operations: = ___________________________________ Discounted at Discounted at _________________________ Recall: FCF = NOPAT–Net Investment in Operating Capital Non constant Growth Stock Valuation
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Corporate Value FINC 3630 Yost The Corporate Valuation Model The Value of a Firm = Value of the Firm’s Operations + Value of the Firm’s Nonoperatin Asset Firm’s Nonoperating Assets Includes Value of Current Assets in place and Present Value of Growth Opportunities Corporate Valuation: Example #1 Consider a firm that just finished the year with $20 million in free cash flows. The firm has a WACC of 10 percent and you expect cash flows to grow at 5 percent for the foreseeable future. In addition, the firm has $100 million in marketable securities, $200 million in debt, $50 million in
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This note was uploaded on 12/11/2011 for the course FINC 3630 taught by Professor Jensen,m during the Summer '08 term at Auburn University.

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CorporateValue - CorporateValue CorporateValue...

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