Discountingtheterminalvaluebacktothepresentattoday’s
costofcapitalandaddingthepresentvalueoftheexpected
cashflowsduringthehigh-growthphaseyieldsthevaluefor
theoperatingassetsforthefirm.Addingbackcashandother
nonoperating assets and subtracting debt and minority
interests yields the value of equity for the firm:
Value of operating assets 2,897.42 million euros
+ Cash and marketable securities76.80 million euros- Debt and nonoperating assets 414.25 million euros
- Minority interests 45.90 million euros
Value of equity in common stock2,514.07 million euros
Value of equity per share 32.84 euros per share
Thestockwastradingatabout25.34eurospershareinMarch
2005, making it undervalued by roughly 25%. Figure 6.1
summarizes this valuation.
FIGURE 6.1Titan Cement: Status Quo