valuation

valuation - ARBITRON Valuation Calcu Discount Rate...

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Discount Rate (Required Rate of Return) Beta Est. Period: Adjusted Beta 1.144 10/06-10/11 Monthly General market risk premium 6.50% 60 Observations Risk Free Rate 3.50% CAPM required return Calculated k e = r f + β (r m - r f ) 10.94% Use GFA 15%? Used k e (Calculated/GFA)? 15.00% Use Cash in FCF? Current Price 36.72 $ I. Intrinsic Value Models: 1. Dividend Discount Model: PE for Terminal Value Present Value Calculations (PE for Terminal Date Dec-12 Dec-13 Dec-14 Dec-15 Dividend Cash Flow 0.40 0.40 0.40 0.40 Terminal Value at Year 5 Total Cash Flow (36.72) $ $0.40 $0.40 $0.40 $0.40 IRR on Cash Flows 5.1% 2. Dividend Discount Model: PBV for Terminal Value Present Value Calculations (PBV for Termina Date Dec-12 Dec-13 Dec-14 Dec-15 Dividend Cash Flow 0.40 0.40 0.40 0.40 Terminal Value at Year 5 Total Cash Flow (36.72) $ $0.40 $0.40 $0.40 $0.40 IRR 4.7% 3. Free Cash Flow to the Firm (FCFF) Free Cash Flows to the Firm Dec-12 Dec-13 Dec-14 Dec-15 Free Cash Flows to the Firm: 66 60 64 66 Terminal Value (constant growth) Present Value of Firm $509 66 60 64 66 Minus: Value of Debt - Plus: Value of Cash & CE - Value of Equity $509 4. Free Cash Flow to Equity (FCFE) Free cash Flows to Equity Dec-12 Dec-13 Dec-14 Dec-15 Free Cash Flows to Equity: 66 60 64 66 Valuation Page - 1
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Terminal Value (constant growth) Total Present Value $509 66 60 64 66 Minus: Value of Debt - Constant growth at k = 15.00% Plus: Value of Cash & CE - Value of Equity 509.3255471 Shares Outstanding (diluted) 27.75 Intrinsic Value $18.35 Valuation Page - 2
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II. Relative Value Models 1. Relative PE Value versus the S&P 500 Index Dec-12 Dec-13 Dec-14 Dec-15 a. Current Relative PE (Stock PE/Index PE) 1.27 1.36 1.36 1.37 Premium (Discount) to the market 0.27 0.36 0.36 0.37 b. Estimated Fair Value Range - Buy 0.50 0.50 0.50 0.50 Premium (Discount) to the market -50% -50% -50% -50% c. Forecast S&P Market PE (x) 13.45 11.93 11.15 10.42 d. Stock EPS 2.15 $ 2.26 $ 2.43 $ 2.57 $ Stock Price - Buy Below this Price (b * c * d) 14.49 13.46 13.54 13.40 Relative to the S&P500: Buy 0.50 Buy below Price Sell 1.00 Sell above Price Relative PE: Maximum 1.77 Average 1.24 Last 3 Years Minimum 0.65 Last 5 Years 1.25 Last Year 2. Relative PE Value versus the S&P 500 S5ADVT Industry Index Dec-12 Dec-13 Dec-14 Dec-15 a. Current Relative PE (Stock PE/Index PE) 1.24 1.34 1.34 1.35 Premium (Discount) to the market 0.24 0.34 0.34 35% b. Estimated Fair Value Range - Buy 1.00 1.00 1.00 1.00 Premium (Discount) to the market 0% 0% 0% 0% c. Forecast Industry PE (x)
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valuation - ARBITRON Valuation Calcu Discount Rate...

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