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# BUSINESS VALUATION - PowerPoint PPT Presentation

BUSINESS VALUATION. KJPP YANUAR BEY & REKAN. Introduction to Valuation : Discount Factor. IVAN TEGUH KHRISTIAN. Goals. Memaparkan overview tentang discount factor Team Y&R dapat melakukan kalkulasi discount factor.

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Presentation Transcript

KJPP YANUAR BEY & REKAN

Introduction to Valuation :

Discount Factor

IVAN TEGUH KHRISTIAN

• Memaparkan overview tentang discount factor

• Team Y&R dapat melakukan kalkulasi discount factor

• Nilaidisusunberdasarkanfungsidaripendapatandimasamendatang yang “ditarik” kemasakinidengansuatuharapanimbalhasiltertentu

• Cost of Capital = Expected Return

“tingkatpendapatan yang diharapkanolehpasaruntukmendapatkandanauntukmembiayaisuatuinvestasi”

-opportunity cost-

Source :

IVAN TEGUH KHRISTIAN

Invest in project

Shareholder invests in financial asset

Firm withexcess cash

A firm with excess cash can either pay a dividend or make a capital investment

Shareholder’s Terminal Value

Because stockholders can reinvest the dividend in risky financial assets, the expected return on a capital-budgeting project should be at least as great as the expected return on a financial asset of comparable risk.

Source : stern-edu

IVAN TEGUH KHRISTIAN

IVAN TEGUH KHRISTIAN

The capital asset pricing model:

E(R) = Rf + B(Rm-Rf)

where:

E(R) = Expected return

Rf = risk free rate of return

B = beta

Rm = market return

• Content

Source : DIOLAH

IVAN TEGUH KHRISTIAN

• For an investment to be riskfree, i.e., to have an actual return be equal to the expected return, there must be:

• No default risk; this usually means a government-issued security; but, not all governments are default free.

• No uncertainty about reinvestment rates.

Practice : use Government Bond Yield

Source : http://www.investing.com/rates-bonds/indonesia-30-year-bond-yield-historical-data

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

IVAN TEGUH KHRISTIAN

• Theoretically, this means using different riskfree rates for each cash flow - the 1 year zero coupon rate for the cash flow in year 1, the 2-year zero coupon rate for the cash flow in year 2 ...

• Practically, if there is substantial uncertainty about expected cash flows, it is enough to use a single riskfree rate for all flows

“USE SINGLE RISK FREE RATE FOR ALL FLOWS”

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

• The risk premium is the premium that investors demand for investing in an average risk investment, relative to the riskfree rate.

• As a general proposition, this premium should be

• greater than zero

• increase with the risk aversion of the investors in that market

• increase with the riskiness of the “average” risk investment

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

• Theory :

• Survey investors on their desired risk premiums and use the average premium from these surveys.

• Surveying in practice is difficult because there is no way to ensure that the numbers that participants provide are the ones they use in their own decision making.

• Assume that the actual premium delivered over long time periods is equal to the expected premium - i.e., use historical data

• Estimate the implied premium in today’s asset prices.

• Practice:

• GunakanDamodaran

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

“A coefficient measuring a stock’s relative volatility” or in other word “Beta measures a stock’s sensitivity to overall market movements”

“is a number describing the correlated volatility of an asset in relation to the volatility of the benchmark that said asset to be compared to.”

It measures the part of the asset’s statical variance that cannot be removed by diversification.

Source : UBS Warburg Dictionary of Finance and Investment Terms

IVAN TEGUH KHRISTIAN

• Stock ANTAM has a beta of 2

The IHSG index increases in value by 10%

The price of ANTAM is expected to increase 20% over the same time period

• Stock ANTAM has a beta of -2

The IHSG index increases in value by 10%

The price of ANTAM is expected to Decrease 20%

over the same time period

Source : ……..

IVAN TEGUH KHRISTIAN

• Beta is a measure of volatility

• Volatility is associated with risk

• If beta is a measure of risk, then investors who hold stocks with higher betas should expect a higher return for taking on that risk

IVAN TEGUH KHRISTIAN

• Theoriticaly : use regression

• Practice : Use Thomson Reuters + How to calculate leverage / unleverage

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

Weighted average cost of capital:

WACC = (D/V)*Rd*(1-T) + (E/V)*Re

where:

D = market value of firm’s debt

Rd = return on debt securities

T = tax rate

E = market value of firm’s equity securities

Re = return on equity securities (from CAPM)

V = total value of firm’s securities (D + V)

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

• Method 1: Ask an investment banker what coupon rate would be on new debt.

• Method 2: Find bond rating for the company and use yield on similarly rated bonds.

• Method 3: Find yield on the company’s existing debt.

Common Practice :

Use Bank Indonesia - Seki 1.26 (IDR), Seki 1.27 (USD)

Source : P.V. Viswanath - DIOLAH

IVAN TEGUH KHRISTIAN

IVAN TEGUH KHRISTIAN

Dalam Penilaian Bisnis, terdapat manfaat pajak (Tax Shield), sehingga Cost Of Debt (1-Tax)

IVAN TEGUH KHRISTIAN

Penilaibisnis (VIII C3):

• Dalamhalpenilaiandilakukanatasobyekpenilaian yang merupakankepemilikanMinoritas, makaPenilai Usaha dapatmenggunakanstruktur modal berdasarkannilaibuku

• Dalamhalpenilaiandilakukanatasobyekpenilaian yang merupakankepemilikanMayoritas. makaPenilai Usaha wajibmenggunakanstruktur modal berdasarkanpasar

PenilaiAset

• Komposisi 65-35 seusai yang berlaku di pasar –common practice

IVAN TEGUH KHRISTIAN