di-0451-e

00 24300 4300 10700 26600 41600 32865 44865 33522

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: e Theory 0 1 2 3 4 5 267.26 271.49 276.14 281.25 286.88 292.61 Ke E 1.343501 11.37% 3,602.61 1.321648 11.29% 3,847.38 1.290998 11.16% 4,252.61 1.281931 11.13% 4,389.38 1.281931 11.13% 4,477.16 1.281931 11.13% 4,566.71 WACC WACCBT E+D 9.559% 10.382% 5,102.61 9.579% 10.365% 5,347.38 9.609% 10.339% 5,752.61 9.618% 10.331% 5,889.38 9.618% 10.331% 6,007.16 9.618% 10.331% 6,127.31 VTS = PV[Ku; D (KuT+ RF- Kd)] ßL EVA 81.82 247.54 253.75 263.53 268.80 EP 138.13 304.18 306.43 315.76 322.08 ECF\\Ku FCF\\Ku 115.50 265.50 -20.50 129.50 288.50 438.50 351.15 471.15 358.17 480.57 ECF\\RF FCF\\RF -28.60 61.40 -174.40 -84.40 118.40 208.40 175.58 235.58 179.09 240.29 3 4 5 Table 11 Valuation of Toro Inc. According to Modigliani and Miller 0 VTS = PV[RF; D RF T] 1 2 745.40 758.62 772.64 787.50 803.25 819.31 Ke E 1.065454 10.26% 4,080.75 1.058571 10.23% 4,334.51 1.050506 10.20% 4,749.12 1.045959 10.18% 4,895.62 1.045959 10.18% 4,993.54 1.045959 10.18% 5,093.41 WACC WACCBT E+D 8.901% 9.654% 5,580.75 8.940% 9.660% 5,834.51 9.001% 9.673% 6,249.12 9.015% 9.672% 6,395.62 9.015% 9.672% 6,523.54 9.015% 9.672% 6,654.01 ßL EVA 94.97 260.52 268.12 278.19 283.75 EP 143.69 309.76 314.75 324.54 331.03 ECF\\Ku FCF\\Ku 154.32 304.32 18.84 168.84 328.41 478.41 391.65 511.65 399.48 521.88 ECF\\RF FCF\\RF -8.91 81.09 -154.54 -64.54 138.44 228.44 195.83 255.83 199.74 260.94 Table 12 is a compendium of the valuations of Toro Inc. performed according to the nine theories. It can be seen that Modigliani and Miller gives the highest equity value (4,080.75) and Miller the lowest (3,335.35). Note that Modigliani and Miller and Myers yield a higher equity value than the Fernández (2004) theory. This result is inconsistent, as discussed in Fernández (2002). 12 - IESE Business School-University of Navarra Table 12 Valuation of Toro Inc. According to the Nine Theories Equity Value of tax Leverage (Value in t = 0) value (E) shield (VTS) cost Fernández (2004) 3,958.96 Damodaran 3,727.34 391.98 231.63 11.05% 10.86% Practitioners’ 3,477.89 142.54 481.07 11.73% 11.41%...
View Full Document

This note was uploaded on 05/10/2013 for the course MBA MBA taught by Professor Mba during the Fall '11 term at ESLSCA.

Ask a homework question - tutors are online