Mod 7
This presentation is the property of its rightful owner.
Sponsored Links
1 / 7

MOD 7: PowerPoint PPT Presentation


  • 89 Views
  • Uploaded on
  • Presentation posted in: General

MOD 7:. Valuation Using Residual Enterprise Income. Lauren Walaszczyk. Quick Background. Headquarter: Tokyo, Japan IFRS Accounting Products (enterprise activities) New/Used Cars Motorcycles Boats Financial Services Brands Acura

Download Presentation

MOD 7:

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Mod 7

MOD 7:

Valuation Using Residual Enterprise Income

Lauren Walaszczyk


Quick background

Quick Background

  • Headquarter: Tokyo, Japan

  • IFRS Accounting

  • Products (enterprise activities)

    • New/Used Cars

    • Motorcycles

    • Boats

    • Financial Services

  • Brands

    • Acura

  • America generates the most revenue and manufactures the highest volume of cars


Cost of enterprise capital

Cost of Enterprise Capital

  • Risk of operations

  • WACC = [Rd * (Vd/Vent)] + [Req * (Veq/Vent)]

  • WACC assumption = 9.61%

  • Changed assumption from Mod 6 (8.8%)  Bloomberg turned out to be less reliable


Discounted cash flow

Discounted Cash Flow

  • Discount rate of 9.61% (WACC)

  • Same parsimonious assumptions


Residual enterprise income

Residual Enterprise Income

  • Discount Rate of 9.61%

  • Accounting based valuation

  • Negative REI  resources are not being used efficiently or resources are not generating enough profit

    • i.e. – Honda’s automobiles are not generating profit


Questions

QUESTIONS?


  • Login