scholarly journals AVALIAÇÃO FINANCEIRA ATRAVÉS DA FERRAMENTA VALUATION, PELO MÉTODO DO FLUXO DE CAIXA DESCONTADO, NO BANCO DE CAPITAL ABERTO ITAÚ UNIBANCO HOLDING S.A

2021 ◽  
Vol 9 (205) ◽  
pp. 1-17
Author(s):  
MARCOS HENRIQUE POLICARPO NEVES
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Fair Value ◽  
Growth Potential ◽  
Fair Price ◽  
Discounted Cash Flow ◽  
Flow Method ◽  
Valuation Process ◽  
A Company ◽  
Discounted Cash Flow Method

The valuation process of companies is essential for investors to estimate the fair value of a company. Once it has been established, it is possible to compare with the market value and thus judge whether an asset is cheap, fair or expensive. There are several methodologies for calculating the valuation of a company, among which the following stand out: method of market multiples; discounted cash flow method; method based on the book value. In this sense, the present work aims to evaluate the fair price of the shares of Itaú Unibanco bank (ITUB4) through the discounted cash flow method. For this, data about the company were used from the balance sheet and the statement of income for the year, made available on the internet by the bank. After these data analyzes and the establishment of some assumptions, the cash flow for the next 10 years was projected. From this, the flows were brought to present value, to calculate the fair price of the company's shares, using an appropriate discount rate. As a final result, the model indicates that the shares are undervalued by the market, that is, they are cheap and with a growth potential of 32%.

Providing a Framework for Testing the Reasonableness of Terminal Period Cash Flow Investments

2020 ◽  
Vol 39 (1) ◽  
pp. 5-13
Author(s):  
Joseph Thompson ◽  
David Neuzil
Keyword(s):  
Research And Development ◽  
Cash Flow ◽  
Free Cash Flow ◽  
Working Capital ◽  
Discounted Cash Flow ◽  
Enterprise Value ◽  
Flow Method ◽  
Equity Value ◽  
A Company ◽  
Discounted Cash Flow Method

Whether using the traditional Gordon Growth formula or the value driver formula, it is common for a valuer to neglect testing the reasonableness of the capitalized free cash flow used in determining the terminal value and, therefore, derive a terminal value that is incorrect. This is troubling considering how important the terminal value is when concluding an equity value; the terminal value most often accounts for a majority of the concluded enterprise value when applying the Discounted Cash Flow method. The purpose of this article is to provide a framework for testing the reasonableness of the amount of terminal cash flow that is reinvested to support the operations into perpetuity. In general, there are three potential areas for a company to reinvest into its future operations: (1) net working capital, (2) purchases of property, plant, and equipment (PP&E), and (3) other investments (e.g., research and development [R&D]). Our article provides an overview of a suggested method for analyzing and calculating the appropriate amount of investments in net working capital and PP&E under the Gordon Growth formula. We also provide an example analysis to illustrate potential issues resulting from expensed investments (e.g., R&D) when applying the value driver formula.

Discounted Cash Flow Method for Valuing International Chemical Distributors

2018 ◽  
Keyword(s):  
Cash Flow ◽  
Discounted Cash Flow ◽  
Case Scenario ◽  
Flow Models ◽  
Flow Method ◽  
Study Approach ◽  
Equity Value ◽  
Multiple Case ◽  
Set Up ◽  
Discounted Cash Flow Method

Do special considerations apply to valuation in the case of large global chemical distributors? This study seeks to identify whether Income-based Discounted Cash Flow method based on projected future income would be suitable to value international chemical distributors. Two- and Three-stage Discounted Cash Flow models will be used. The expected companies’ enterprise and equity value are compared with the existing companies’ valuations. A base, bear and bull case scenario will be set up to establish the range of the company’s value for comparison with the existing valuation. This study adopts a single multiple-case study approach where actual financial data from three of the world’s largest chemical distributors were used to establish the existing companies’ valuation to demonstrate the validity and applicability of the Discounted Cash Flow method for sensitivity analysis.

Part III Substantive Rights, 9 Compensation

2017 ◽  
Author(s):  
McLachlan Campbell ◽  
Shore Laurence ◽  
Weiniger Matthew
Keyword(s):  
International Law ◽  
Cash Flow ◽  
Practical Importance ◽  
The State ◽  
Practical Application ◽  
Discounted Cash Flow ◽  
Flow Method ◽  
Monetary Compensation ◽  
Discounted Cash Flow Method

Chapter 9 examines the obligation upon the State committing the international wrong to make reparation through restitution or monetary compensation. It first considers the international law standards of compensation for expropriation before proceeding to discuss the range of options adopted in practice by arbitral tribunals. It then looks at practical application of the main methods of valuation used to determine the appropriate level of compensation, particularly the ‘discounted cash flow’ method, along with the issue of causation in international law. The chapter concludes with an analysis of five topics that are assuming greater practical importance in the approach of arbitral tribunals to remedies: the award of moral damages in exceptional circumstances; the claimant’s duties of mitigation of loss; the potential for the availability of non-pecuniary remedies; interest; and costs.

scholarly journals Synergy evaluation in mergers and acquisitions

2020 ◽  
Vol 19 (2) ◽  
pp. 108-113
Author(s):  
Victoria Bataeva
Keyword(s):  
Mergers And Acquisitions ◽  
Cash Flow ◽  
Synergy Effect ◽  
Discounted Cash Flow ◽  
Flow Method ◽  
Discounted Cash Flow Method

This paper analyzes the M&A deal of Rostelecom and Tele2 Russia in order to evaluate the synergy effect as a result of consolidation. Discounted cash flow method is applied to determine the companies’ enterprise values. As a result of the research, synergy is equal 38 003 million rubles and the M&A deal is recognized as an effective one.

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