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PFIN > Valuation > Flashcards

Valuation Flashcards

1
Q

Wovon macht man seine Entscheidungen welche Methode (APV / WACC) abhängig

A

Unterscheidung WACC und APV:

  • richtig angewandt, erreichen beide Methoden das gleiche Resultat
  • WACC mit einem konstanten Diskontierungssatz anzuwenden ist nur richtig wenn der Verschuldungsgrad konstant bleibt
  • APV bietet sich besonders an bei feststehendem Zins- und Tilgungsplan und ermöglicht eine getrennte Betrachtung von Investitions- und Finanzierungseffekten
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2
Q

FCFF

A

Free Cas Flow to Firm

  • expected after-tax cash flow generated by a company of a project as if it were financed entirely with equity capital
  • CF available to capital providers.
  • Cash available
    • to repay debt
    • (re)investment
    • dividens/share repurchases

-> Net amount of cash after expanses, taxes and changes in net working capital

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3
Q

FCFF Formel

A

FCFF = EBIT*(1-Tc)+Depr. - CAPX - ΔNWC

ΔNWC = NWCt - NWCt-1

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4
Q

EBIT

A

“Earnings before interest and taxes”

= Umsatzerlöse - Betriebsaufwand - Abschreibung

= Erlöse - HK - Abschreibungen

= Revenue - COGS - Depr.

COGS = “Cost of Goods Sold”

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5
Q

Tc

A

Tc = Steuern / (EBIT - Zinsaufwand)

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6
Q

NWC

A

Net Working Capital

= Umlaufvermögen - Liquide Mittel - Kurz. Verbindl.

  • “Erhöhung des Umlaufvermögens
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7
Q

CAPX

A

Capital Expenditures

  • “Investitionsausgaben ins Anlagevermögen”
  • “Kapitalaufwendungen”
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8
Q

Net Income

A

Net Income = EBIT - Zinsen - Taxes

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9
Q

WACC with and without corporate taxes

A

Without Corporate Taxes:

  • WACC is constant

With Corporate Taxes:

  • WACC declines as the firm increases its reliance on debt financing and the interest tax shield grows
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10
Q

Ewige Rente

A

VL = FCFF/(rwacc - g)

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11
Q

WACC and the cost of debt

A
  • if debt is risk free = use the risk free rate
  • if debt is risky: Default risk involved
    • Zero Bond yield curve of the matching rating class
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12
Q

WACC and the target Capital structure

A
  • should be the target capital structure for the particular project under consideration
  • Common Mistake
    • Using D/V of the firm undertaking the project
    • Using D/V of the projects financing (e.g. using 100% if project is all debt financed)
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13
Q

Equity & Debt

A

Equity = # of shares * share price

Debt = Value of outstanding bonds + book value of non traded debt

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14
Q

FCFE

A

Free Cash Flow to Equity

  • Valuation Method for the Equity Value
  • Expected CF to Equity Holders
  • Cash avaiable for
    • investment in projects
    • distribution to common shareholders
  • We explicity calculate the FCFF available to EQUITY HOLDERS after taking into account all payments to & from debt holders
  • Discounted using the equity cost of capital
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15
Q

FCFE - Formel

A

FCFE = FCFF - (1 - T)*(interest payments) + Net Borr.

FCFE = Net Income + Depr. - CAPX - ΔNWC + Net Borr.

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16
Q

FCFF vs. FCFE

A

FCFF:

  • No adjument for debt repayment necessary
  • Expected CF to ALL CAPITAL PROVIDERS

FCFE:

  • Adjustment for debt repayment becomes necessary
    • Shareholder point of view: take all CF into account that enter/exit their sphere
      • Net Borrwoing
      • Interest Payments
  • Expected CF to EQUITY INVESTORS
17
Q

Multiples Problems:

A
  • When the industry is undervalued, all the companies in it are undervalued
  • easy to misuse and manipulate
  • Comparability is key
18
Q

Using one or several Multiples ?

A
  • Picking ONE Multiple usually perfoms best!
  • Weighted Average is ok
  • A simple average of multiples is mostly inappropriate!!!!!!
    • it averages good with poor ones
    • even worse when you mix with multiples from the regressions approach
19
Q

Price-Earning Ration

A

PE = (P / EPS)

Is used to determine how much investors are willing to pay for a stock relative to the companys earnings

  • Higher Growth Firms: Higher P/E-Ratio then lower growth firms
  • riskier Firms will have a lower P/E Ratio than lower risk firms
  • firms with lower reinvestment needs will have higher PE Ratios than firms with higher rates
20
Q

EPS

Earning Per Share

A
  • portion of a company’s profit allocated to each outstanding share of stock
  • serves as an indicator of a companys profiability

EPS= (Net Income - Dividends)/#shares

PFIN (5 decks)

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