Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
isefficientlyusingitsresources,though, weshould change the reinvestment rate to reflect industry averages. Themoreextremescenar ...
capital is not adjusted to reflect the value of the researchassetorthecapitalvalueofoperatingleases, and by the presence of high ...
Inthisillustration,weestimatethereinvestmentrate,return on capital, and expected growth rate for Titan Cement, a Greek cement co ...
Finally,wecomputetheexpectedgrowthratebymultiplying the after-tax return on capital by the reinvestment rate: If Titan Cement ca ...
WealsocomputedTitanCement’sreturnoncapitaleachyear for the five years (in millions of euros): Withthereturnin 2000 astheoutlier, ...
Forexample,afirmthatseesitsreturnoncapitalimproves from 10 percent to 11 percent while maintaining a reinvestmentrateof 40 perce ...
In2004,Blockbuster,thevideorentalcompany,reportedan after-taxreturnoncapitalof4.06%andareinvestmentrateof 26.46%. If it maintain ...
have to move up the income statement and first estimate growth in revenues. Next, we use the firm’s expected operating marginsin ...
Iftheprojectedrevenuesforafirm 10 yearsoutwouldgiveit a 90 percentor 100 percentshare(orgreater)oftheoverall market in a competi ...
$4.703 billion for the firm in 10 years and a compounded revenue growth rate of 46.98 percent. Theotherapproachistoforecastthee ...
Year Revenue Growth Rate (%)Revenues ($millions) 3 80 2,025 4 60 3,239 5 40 4,535 6 25 5,669 7 20 6,803 8 15 7,823 9 10 8,605 10 ...
firms not only will be worth nothing but are unlikely to survive. For firms to be valuable, the higher revenues eventuallyhaveto ...
counterparts. If they were, you would expect to see a migration of traditional retailers to online retailing and increased compe ...
Basedonourprojections,SiriusRadiocanexpecttocontinue reporting operating losses for the nextfour years, but the margins will imp ...
revenuestogrowby$1billionanduseasales-to-capitalratio of2.5,wewouldestimateareinvestmentneedforthisfirmof $400 million ($1 billi ...
inthatyearanddivideitbythetotalcapitalinvestedinthat firm in that year. The former number comes from our estimatesofrevenuegrowt ...
sales-to-capital ratio for the firm and the average sales-to-capital ratio for its peer group. Weuseasales-to-capitalratioof1.50 ...
Sincewecannot estimatecash flowsforever,wegenerally imposeclosureindiscountedcashflowvaluationbystopping ourestimationofcashflow ...
rate is 3 percent, the expected liquidation value can be estimated: The limitation of this approach is that it is based on accou ...
revenues in that year. For instance, a firm with expected revenues of $6 billion 10 years from now will have an estimated termin ...
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