Project #78748 - Valuation of (Expedia and Facebook

Hi,

I would like you to valuate two companies (Expedia and Facebook) using the strawman method by using excel sheet and a 4 page paper for each company. I've added the instructions of the assignment below in bold and I've completed solution of a different company(Exxon Mobil) for your reference and the 5 page paper as well. Please make sure you follow the exact way the excel sheet I've provided and complete all the parts.

Individual Final Project Assignment: Choose a company to value for the final project. The company MUST be publicly traded and based in the USA. I recommend you pick a company which is not in distress and which has at lease 5 years of solid financial performance to examine in your analysis. For this project, you are not required to model complete financial statements (as in the team project). You should model only those line items crucial to your valuation. At a minimum, you should model the following for at least five years in the future: • Revenue • Direct costs • Depreciation • Operating income • Operating assets • Operating liabilities • Financial leverage • Interest expense You should compare the forecast figures to the past five years and include thorough explanations of your reasoning for each item you model. Use ratio analysis, common-size figures and growth analysis if it helps illustrate your reasoning. Required: Value the company using the three DCF methods (FCFE//Ke, FCFF//WACC and APV). Include: • Detailed computation of FCFF and FCFE • Detailed explanations of assumptions in your costs of capital • Comparison of these DCF valuations to other methods, such as PE, EV/EBITDA, etc. • Identify which value you believe is the true intrinsic value. • A comparison of your intrinsic equity value per share to the market price per share at the date of interest. Work will be graded according to the following rubric: - Process (e.g. documented assumptions, robust analysis, follows accepted steps, etc.) - Legitimacy (e.g. forecasts are realistic, inputs & outputs make economic sense, follow reasonable patterns, are due to identifiable causal relationships, etc.) - Technique (e.g. correct computations are chosen, computations are made properly) - Thoroughness (e.g. Double check results vs other methods: FCFE//Ke, FCFF//WACC, APV, multiples…) - Completeness (e.g. all required elements are present) The written portion is a technical discussion of your valuation: Why the method(s) you used for your final valuation opinion were the most appropriate, why your inputs and other assumptions were correct and what areas of uncertainty still exist. Be sure to state how you are treating these uncertainties: sensitivity analysis, scenarios, etc. In the write-up, you must explain why there is a difference between the intrinsic value you compute and the market price and the significance (if any) of this difference. I would expect a four-page detailed defense of your analysis, plus any spreadsheets, exhibits and anecdotal evidence which supports your case. The write-up is graded based on the rigor of your analysis, so be thorough. The basic outline of the write-up should follow Fernandez’ grid (see attached).

Subject Business
Due By (Pacific Time) 08/11/2015 01:00 pm
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