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Model Choice
(in currency)
Yes
(Yes or No)
If the earnings are positive and normal, please enter the following:
What is the expected inflation rate in the economy?
2.00%
3.89%
What is the expected growth rate in earnings (revenues) for this firm in the near future
Does this firm have a significant and sustainable advantage over competitors?
Differential Advantages: High growth comes from a firm earning excess returns on its projects,
possessed by the firm over its competitors. This differential advantage can be legal (as is the case with lega
or a strong brand name (as is the case with many consumer product firms) or economies of scale. The ques
the existing differential advantage but also to the future.
Dividend Policy
What did the firm pay out as dividends in the current year?
Can you estimate capital expenditures and working capital requirements?
Enter the following inputs (from the current year) for computing FCFE
Net Income (NI)
$1,094.00
$958.00
$4,749.00
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($336.00)
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s to the model
(in percent)
(in percent)
15.00%
(in percent)
Yes
(Yes or No)
cess returns on its projects, which in turn comes from some differential advantage
be legal (as is the case with legal monopolies like telecom), or technological,
or economies of scale. The question that is being asked relates not just to
(Yes or No)
(Yes or No)
(Yes or No)
(Yes or No)
(Yes or No)
16.22%
(in percent)
No
(Yes or No)
$0.26
(in currency)
Yes
(Yes or No)
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($1,800.60)
DEL
Discounted CF Model
Current Earnings
FCFE (Value equity)
10 or more years
Three-stage Growth
! In an n-stage model, you will estimate target operating margins (if valuing the firm
or net margins (if valuing equity) and revenue growth each year.
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h each year.
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