Because firm valuation is an overriding concern in M&A transactions, you have been asked to conduct a company valuation analysis using all three methods covered in class: DCF, comparable transactions and multiples (relative valuation).
For the DCF analysis. You can either use cash flow estimation (using analysts’ forecast or your own) or the formula approach (seen in Weston et al handout). Be clear as to what your main assumptions are regarding Â terminal value calculation and operating cash flow estimations.Â
Compare all three methods with current stock price of the company, mentioning advantages and disadvantages for each method for the case being and write up your conclusions and recommendations regarding the firm’s true value (stating whether you feel the company is overvalued or undervalued and why).
This term paper is an individual effort and should be no longer than 4-6 slides (ppt format) not including appendix