Sampa Video case questions
FIN 286 Hallman
Fall 2014
1. What is the value of the project assuming the firm was entirely equity financed? What
are the annual projected free cash flows? What discount rate is appropriate?
2. Value the project using the Adjus
Capital Structure
(chapter cites are to Berk and DeMarzo)
Capital Structure assuming Perfect Capital
Markets (C14)
Miller and Modigliani (M&M) irrelevancy to total value in
a world with no capital market imperfections
Leverages effect on equity risk (l
Campbell Soup Company Comp Data
all data pulled from Bloomberg
near end of day on 29-July-2014
data entered by GH on 03-Aug-2014
page
1
Ticker
P/E TTM
1
Current Multiples
2
1
1
2&3
P/E Current
EV/EBITDA
P/E NTM
TTM
EV/EBITDA
Current
EV/EBITDA
NTM
1
Size a
Relative Valuation with
Comparable Assets
(aka comps and multiples)
28, 51, example
C8 of the valuation text, Titman and Martin
FIN 286 - Hallman
Relative Valuation Lecture Map
Overview of Relative Valuation, also known as
valuation with comps and multipl
Steps to a DCF Valuation Hallman Summer/Fall 2014
This document is intended to guide class discussion and is not a full description of the
steps to a DCF.
In addition, all of these cash flow calculations are described in your valuation textbook in
chapter
DCF Valuation
Hallman FIN 286
2014
The Logic of DCF: Why does a DCF
calculation give you the value?
One of the basic principles of finance is that an
asset is worth the risk-adjusted present value
of the projected future cash flows accruing to
the asset o
FIN-374C
Sessions 2&3
Chapter 2 - Forecasting and Valuing Cash
Flows
Review from Session 1
Firms want to create value
by initiating and managing
investments that generate
future cash flows that are
worth more than the
amount invested.
Invest $100 millio