Reference no: EM131093337

Big picture 4

For this last course project assignment you will explore the company-level valuation. Using the same company that you have analyzed throughout the course, prepare a paper that discusses the following items.

1. Discounted Cash Flow Valuation:
   1. Estimate the cost of capital for your company. (In Module 05 you already estimated the cost of equity. To estimate the cost of capital, you need to include an estimate of the cost of debt and calculate the weighted average cost of capital for your company.)
   2. Estimate the free cash flows to the firm for the future. One way to do this is simply use the current trailing twelve months cash flows as a proxy for the future cash flows.
   3. Calculate the present value of all future cash flows. (You can simply calculate the cash flows in perpetuity with a modest constant growth rate.)
2. Relative Valuation:
   1. Conduct a relative valuation of your company using one of the metrics discussed in the course readings.
   2. For your comparable firms you should choose 2 or 3 firms that are considered competitors or in a related industry to your firm.
3. Comparison to Listed Valuation:
   1. From Yahoo! Finance identify and indicate the Market Capitalization and Enterprise Valuation.
   2. Discuss how your valuations from above compare in relation to these amounts from Yahoo! Finance. Assuming there are differences, what might explain such differences?

Paper Mechanics should be as follows:

1. There is no minimum page length requirement for this paper.
2. The paper should be in APA format (i.e. cover page, double-spaced, 12 pt font, reference section at end, etc.).
3. The paper should include at least 1 source, such as the annual report, Yahoo! Finance or Google Finance, the company's web site, etc.
4. The paper should be divided into the sections indicated above (label each section clearly).