Nestl module 5 valuation using forecasts of cash flows
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Nestl é Module 5: Valuation Using Forecasts of Cash Flows. Dan Finan. Coffee Production Industry. Overview of Nestle. Six reportable segments: Zone Europe Zone Americas Zone Asia, Oceania and Africa Nestle Waters Nestle Nutrition Other Food and Beverages. Overview of Nestle.

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Nestl module 5 valuation using forecasts of cash flows

NestléModule 5: Valuation Using Forecasts of Cash Flows

Dan Finan



Overview of nestle
Overview of Nestle

  • Six reportable segments:

    • Zone Europe

    • Zone Americas

    • Zone Asia, Oceania and Africa

    • Nestle Waters

    • Nestle Nutrition

    • Other Food and Beverages


Overview of nestle1
Overview of Nestle

  • Products are categorized under:

    • Powdered and Liquid Beverages

    • Milk Products and Ice cream

    • Prepared Dishes and Cooking Aids

    • Confectionery

    • Pet Care

    • Water

    • Pharmaceuticals

    • Nutrition


Nestle monthly share prices
Nestle Monthly Share Prices

January 2009 – December 2013


Monthly 30 year treasury yields
Monthly 30-Year Treasury Yields

January 2009 – December 2013


Monthly 30 year treasury yields1
Monthly 30-Year Treasury Yields

I will use 3.69% for rf(return as of 2/11/14).


Monthly s p 500 returns
Monthly S&P 500 Returns

January 2009 – December 2013


Regression analysis between nestle share price and s p returns
Regression Analysis(between Nestle share price and S&P returns)


Regression analysis between nestle share price and s p returns1
Regression Analysis(between Nestle share price and S&P returns)


Cost of equity capital u sing both adjusted and unadjusted beta values
Cost of Equity CapitalUsing both Adjusted and Unadjusted Beta Values



Enterprise cost of capital u sing both adjusted and unadjusted beta values
Enterprise Cost of CapitalUsing both Adjusted and Unadjusted Beta Values



Beta values from other sources1
Beta Values from Other Sources

Using adjusted Beta produces WACC closer to Bloomberg’s calculation.

Using unadjusted Beta produces WACC closer to the aggregate of other sources’ calculations.




Dcf model using wacc unadjusted similar to other sources calculations
DCF Model using WACC--Unadjusted β(similar to Other Sources’ Calculations)




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