Add up liquidation value of particular assets then su

Liquidation value
Book value
Cash
Receivables
Invetnories
Net plant and equipment
Liquidation costs
Liquidation value of assets
Liabilities
Current liabilities
Long term debt
Liquidation value for shareholder

up liquidation value of particular assets then substract liabilities in order to find what is left to shareholders
Liq. Value as % of book value

Lquidation value

is left to shareholders

1. Select enterprises to peer group

2. Find target P/E and MV/BV ratio
3. Estimate the value of the company

Cost of capital estimation

Assumptions:
risk free rate

cost of debt
unlevered beta
equity risk premium
debt-equity ratio
marginal tax rate
unlevered cost of equity
debt ratio

8%
9%
0.9
7%
25%
30%

leveraged beta
cost of levered equity

14.3% SML
80%
1.1 R.Hamada equation
15.4% SML

WACC

13.6% This is the discount rate

Cash flow estimation

Sales
EBITDA
Tax
EBITDA(1-T)
Depreciation Tax Shield
Working Capital
Capital Expenditure
Free Cash Flow (FCF)
PV(FCF)
PV(Terminal Value)
Firm's value
Less liabilities
Shareholder's value

Past period
1995
304.6

1996

Explicit forecasting period

1997
1998
1999

Terminal Value
2000 to infinity

Use no growth model

Cost of capital estimation

Assumptions:
risk free rate

cost of debt
unlevered beta
equity risk premium
debt-equity ratio
marginal tax rate
unlevered cost of equity
debt ratio

8%
9%
0.9
7%
25%
30%

leveraged beta
cost of levered equity

14.3% SML
80%
1.1 R.Hamada equation
15.4% SML

WACC

13.6% This is the discount rate

Cash flow estimation

Sales
EBITDA
Tax
EBITDA(1-T)
Depreciation Tax Shield
Working Capital
Capital Expenditure
Free Cash Flow (FCF)
PV(FCF)
PV(Terminal Value)
Firm's value
Less liabilities
Shareholder's value

Past period
1995
304.6

1996

Explicit forecasting period

1997
1998
1999

Terminal Value
2000 to infinity

Use no growth model

Cost of capital estimation

Assumptions:
risk free rate

cost of debt
unlevered beta
equity risk premium
debt-equity ratio
marginal tax rate
unlevered cost of equity
debt ratio

8%
9%
0.9
7%
25%
30%

leveraged beta
cost of levered equity

14.3% SML
80%
1.1 R.Hamada equation
15.4% SML

WACC

13.6% This is the discount rate

Cash flow estimation

Sales
EBITDA
Tax
EBITDA(1-T)
Depreciation Tax Shield
Working Capital
Capital Expenditure
Free Cash Flow (FCF)
PV(FCF)
PV(Terminal Value)
Firm's value
Less liabilities
Shareholder's value

Past period
1995
304.6

1996

Explicit forecasting period

1997
1998
1999

Terminal Value
2000 to infinity

Use no growth model