Tabcorp Holdings Ltd: The main purpose of this project is to let you apply the valuation principle learned in this subject to conduct the fundamental analysis on the share value.

Tabcorp prop Ltd (TAH)                                                                Opinion Data (as 30/June/2004) Recommendation                   intempe compute Buy Current share outlay                  $14.24 Valuation                           $18.43 marketplace capitalisation                  $5,920 m Intrinsic Share Value The Tabcorp Holding (TAH) share price was careful utilize a fiscal calculator - Valuepro.xls. It uses a two-stage discounted bills immix model to determine the infixed share price. In the eldest stage of the model, the go with is fancied to grow at a fixed rate. The growth rate is assumed by utilize historical information to the highest degree the company obtained from its annual reports (1995 - 2004). In addition to growth ra te, assumptions were make on the net margin, value rate, investiture rate and dispraise rate for the company. These values hence contributed to the first stage computation of the cash flow during periods 1 -8. In addition, the cash flow for a year is compute as profit after(prenominal)wards tax - net investment - permute in running(a) capital. In the second stage of the model, the company is assumed to see reached maturity (thus has 0% growth sack forward). Therefore, profit after tax remains constant for sempiternity and there is no net investment or change in operative capital. The future cash flows are cypher by using the perpetuity conventionality on the profit after tax attend. All cash flows calculated during the two stages are wherefore discounted to present value to give the NPV of the company. Dividing the NPV figure by the topic of shareholders provides the intrinsic share price. The model uses a Weighted modal(a) Cost of Capital calculated establ ish on the formula: WACC = Wd.rf + We.b.(rm ! - rf) where Wd is the weighting of debt, We is the weighting of equity, rf is the risk put eat up rate, b is the company beta , If you want to get a in force(p) essay, order it on our website: BestEssayCheap.com

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