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Calculate the firms value for company cc

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Reference no: EM132492391

Analyst B is carrying out a company analysis of Company CC, which is in the manufacturing sector. The analyst wants to value Company CC first, before analyzing its competitive advantage. The analyst collated the following information that relates to Company CC:

Current free cash flow to the firm R10 000 000

Current market value of bonds R20 000 000

Weighted average cost of capital 12%

Tax rate 28%

Free cash flow to the firm growth rate 5%

Number of ordinary shares 100 000

Current market share price R1400

Question 1. Calculate the firms value for Company CC by using the costant growth free-cash-flow-to-the-firm valuation approach.

Question 2. Calculate the intrinsic value of the equity per share for Company CC by using the constant-growth FCFF valuation approach.

Question 3. Based on the current share price, is Company CC's share overvalued or undervalued? Motivate your answer.

Question 4. Briefly discuss two (2) main strategies of the Porter's competitive advantage model that you will use to analyze Company CC's competitive advantage.

Reference no: EM132492391

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