Perform a corporate and stock valuation

Reference no: EM132921805

SINOPHARM GROUP has an estimated cost of capital of 12 per cent in which the management believe is applicable to the valuation of Pharmacia once it is acquired and becomes part of the group. Assume a tax rate of 20 per cent is applicable for both SINOPHARM and Pharmacia. SINOPHARM has 10 million ordinary shares in issue and the current market value of a share is $10.64.

Assume that you are a consultant with Pan Asia Consulting.

i) From the above case study and the data provided, perform a corporate and stock valuation for Pharmacia using the following approaches:
- Free Cash Flows (FCF)
- Earnings Multiple
- Sales Multiple
- BV Multiple
- Dividend Multiple
- BV per share approach (purely based on value from the balance sheet)
- MV per share approach (similar to BV per share approach except replacing BV of any assets with its MV if MV of the asset is available)

ii) Which of the above valuation methods has resulted in the highest valuation for Pharmacia? What do you think could be the possible reasons for that? (100-500 words)

Attachment:- The Pharmacia Deal.rar

Reference no: EM132921805

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