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CASE STUDY some: PAGINAS AMARALES VALUATION
AFF5300 Case Research in Finance- March 2013
Executive brief summary
Juan Lopez, a new associated of JP Morgan's Latin America M& A Group was given a responsibility to worth the telephony directory businesses in Peru, Brazil, and Chile of Paginas Amarelas. The aim of this report is by using the fundamental method of help Lopez to estimate the value of these three devices within Paginas Amarales. This kind of analysis used the lower price cash flow (DCF) approach. The analysis first of all determined the future perpetuity progress rate to look for the terminal benefit in the DCF valuation. To derive the DCF, it is important for this analysis to obtain the discount rate. Hence, it estimated the Fat Average Cost of Capital (WACC) as the discount rate. To approximate the WACC, the following inputs are predicted to generate the WACC of each and every country: cost of debt and the dost of equity, plus the debt to value percentage and collateral to value ratio. After the analysis attained the discount rate of each country, the DCF values of the 3 countries were estimated. This kind of analysis creates the value of $208, 260, 206 in USD of the 3 units within Paginas Amarales. There are some flaws in using the models and approaches to make the inputs which was discussed. Nevertheless , due to the insufficient and the constraints of data and information, it is difficult to provide the particular valuation. Even so, this analysis generated an in depth approximation which is still a good guide to observe the valuation of Web Amarelas.
By simply: Tam Huynh (24675512)
Desk of Articles
1 . Introduction2
2 . Valuation Analysis's Assumptions2
3. Determination of Permanent Perpetual Growth Rate3
four. Cost of Debt Estimation3
5. Cost of Collateral Estimation3
5. 1 . Determining Risk-Free Rate4...