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We use a decision-tree-based machine learning approach to perform relative valuation. Stocks are valued using market-to-book, enterprise-value-to-assets and enterprise-value-to-sales multiples. Our machine learning models reduce median absolute valuation errors by between 17% and 50% relative to traditional models. The identified valuation drivers are consistent with theoretical predictions derived from a discounted cash flow approach. Accounting variables related to profitability, growth, efficiency and financial soundness are important valuation drivers. The valuations produced by machine learning models behave like fundamental values. A value-weighted strategy that buys (sells) undervalued (overvalued) stocks generates highly significant abnormal returns. When we use models trained on listed firms to value IPOs, machine learning models outperform traditional models in valuation accuracy and can identify mispriced IPOs.

Projeto de mestrado em Finance, No âmbito do projeto de trabalho final de mestrado em Finanças da Universidade do Minho, foi realizada uma avaliação da Intel Corporation. Este relatório foi elaborado de acordo com as diretrizes da CFA. A Intel Corporation opera numa indústria que ganhou grande destaque na última década e promete ser uma das indústrias mais cruciais para os avanços tecnológicos da próxima geração. A empresa está a atravessar uma fase única na sua história. Devido ao ambiente altamente competitivo e à rápida evolução do sector nos últimos anos, a empresa foi forçada a alterar a sua estratégia e a investir mais do que nunca. A empresa tem sido líder de mercado quase desde a sua criação, mas isso mudou em 2021. Atualmente, esta indústria está muito concentrada em Taiwan e na China e a Intel está a tentar diferenciar-se investindo e criando novas fábricas na Europa e nos EUA. Para o desenvolvimento deste relatório, apenas foi considerada informação pública disponível até 28 de Março de 2023. Para avaliar a empresa, foram implementados três métodos diferentes. O preço estimado de $33,98 foi alcançado através do método Discount Cash Flow, complementado pelo Dividend Disocunt Model e Avaliação Relativa através dos múltiplos dos seus competidores. Com base num potencial de subida de 16%, esta avaliação sugere uma recomendação de COMPRA. Para confirmar a robustez da avaliação e incluir os riscos do investimento foi também efetuada uma análise de sensibilidade e uma análise de cenários, obtendo-se uma empresa com perfil de Alto Risco, pois apesar de a empresa ser madura e estar bem estabelecida no mercado, a Intel está a atravessar um período de considerável investimento e incerteza., As part of the University of Minho master’s in Finance final work project, it was performed an evaluation of Intel Corporation. This report has been written according to the CFA guidelines. Intel Corporation operates in an industry that has gained much prominence in the last decade and promises to be one of the most crucial industries for next-generation technology advancements. The company is going through a unique phase in the company's history. Due to the highly competitive environment and rapidly evolving industry in recent years, the company has been forced to change its strategy and invest more than ever before. The company has been a market leader almost since its inception, but that changed in 2021. Currently, this industry is very concentrated in Taiwan and China and Intel is trying to differentiate itself by investing and creating new fabs in Europe and in the US. For the development of this report, it was only considered public information available until 28th March 2023. In order to evaluate the company, it was implemented three different methods. The price target of $33.98 was reached through the Discount Cash Flow method, complemented by the Dividend Discount Model and Relative Valuation through Peer’s Multiples. Based on an upside potential of 16% this valuation suggests a BUY recommendation. To confirm the robustness of the valuation and to include the investment risks was also performed a sensitivity analysis and a scenario analysis, achieving a High-Risk profile company, even though the company is mature and well-established in the market, Intel is going through a period of considerable expenditure and uncertainty.

The objective function of an optimisation model is the main driver for obtaining optimal values for decision variables. An objective function that does not well represent an inventory or production-inventory setting might then mislead the decision maker. There are two well-established frameworks for constructing the objective function of inventory or production-inventory models in an economic context; namely the Net Present Value approach and the average cost/profit approach. In recent years, a variant of the Net Present Value approach has been introduced and used by researchers which is actually a combination of the two main approaches. The researchers, however, provide little justification for this approach and its analytical foundation. In this research, we compare this approach with the two known approaches both analytically and numerically. The results of our study show that, under some circumstances, the new approach significantly deviates from the other two in terms of the optimal values for the decision variables and objective function.

Intelligent automation software technology is key to remaining competitive in the current growing digital landscape. Appropriate techniques should be used to appraise such investments and make correct automation investment decisions. After a comprehensive literature review, three limitations on automation investment decisionmaking were found in the extant literature: (1) time value of money not considered, (2) interpretative and definitional issues related to the popular Return on Investment (ROI) technique, and (3) the widely recommended Net Present Value (NPV) technique appeared not to have been used. This study aims to identify which automation investment appraisal and valuation techniques are used in South Africa in practice and the relevant metrics applied, to assess these for potential gaps in their application and to ascertain the quality of automation investment decision-making. An online survey questionnaire was distributed to organisations that have invested in automation technology in South Africa to gather data from automation consumers and automation consultants. Payback period, ROI, and budget availability were the most common appraisal techniques used by respondents, followed by popular Discounted Cash Flow (DCF) capital budgeting techniques, NPV and Internal Rate of Return (IRR). The results further point toward deficiencies in the application of appraisal techniques compared to finance literature, which indicates suboptimal quality automation investment decision-making. Important unquantified qualitative factors influencing the decision-making process were also identified. These qualitative factors were considered by respondents more often in their decision-making process than quantitative factors. Future research in this area should include quantifying qualitative factors to improve the quality of automation investment decision-making.

The degree of uncertainty associated with the value of a company plays a relevant role in valuation analysis. We propose an original and robust methodology for company market valuation, which replaces the traditional point estimate of the conventional Discounted Cash Flow model with a probability distribution of fair values that convey information about both the expected value of the company and its intrinsic uncertainty. Our methodology depends on two main ingredients: an econometric model for company revenues and a set of firm-specific balance sheet relations that are estimated using historical data. We explore the effectiveness and scope of our methodology through a series of statistical exercises on publicly traded U.S. companies. At the firm level, we show that the fair value distribution derived with our methodology constitutes a reliable predictor of the company’s future abnormal returns. At the market level, we show that a long-short valuation (LSV) factor, built using buy-sell recommendations based on the fair value distribution, contains information not accessible through the traditional market factors. The LSV factor significantly increases the explanatory and the predictive power of factor models estimated on portfolios and individual stock returns.

The resource-constrained project scheduling problem (RCPSP) is a basic problem in project management. The net present value (NPV) of discounted cash flow is used as a criterion to evaluate the financial aspects of RCPSP in many studies. But while most existing studies focused on only the contractor's NPV, this article addresses a practical extension of RCPSP, called the payment scheduling negotiation problem (PSNP), which considers both the interests of the contractor and the client. To maximize NPVs of both sides and achieve a win-win solution, these two participants negotiate together to determine an activity schedule and a payment plan for the project. The challenges arise in three aspects: 1) the client's NPV and the contractor's NPV are two conflicting objectives; 2) both participants have special preferences in decision making; and 3) the RCPSP is nondeterministic polynomial-time hard (NP-Hard). To overcome these challenges, this article proposes a new approach with the following features. First, the problem is reformulated as a biobjective optimization problem with preferences. Second, to address the different preferences of the client and the contractor, a strategy of multilevel region interest is presented. Third, this strategy is integrated in the nondominated sorting genetic algorithm II (NSGA-II) to solve the PSNP efficiently. In the experiment, the proposed algorithm is compared with both the double-level optimization approach and the multiobjective optimization approach. The experimental results validate that the proposed method can focus on searching in the region of interest (ROI) and provide more satisfactory solutions.

BACKGROUND Despite Group B streptococcus being a leading cause of maternal and infant morbidity and mortality, no vaccine is currently available to prevent this disease. To inform vaccine developers, countries, and funders, we analyse in this paper the key factors likely to influence the demand for a GBS vaccine and the long-term financial sustainability for a commercial entity considering the development of such a vaccine. METHODS By using population-based forecasting, we estimated the demand for a GBS vaccine based on the burden of disease, the strength of the maternal immunisation systems, the fiscal space, and the track record in introducing new vaccines. Furthermore, we estimated the financial viability for a vaccine developer by estimating the Net Present Value of the vaccine development project using a Discounted Cash Flow model. RESULTS Demand for this vaccine can be significant if policy recommendations for use are adopted by countries, in particular the largest ones, most of which have a burden that justifies the use of the vaccine and if financing for the vaccine will be made available either by countries themselves or by funding mechanisms such as Gavi, the Vaccine Alliance. Different administration schedules may result in even larger demand. With a widespread policy recommendation, the commercial viability of this vaccine can be achieved. The cost of clinical development - particularly the type of pivotal trial required - and the number of competitors are the factors that can strongly influence the long-term financial sustainability and hence the interest of vaccine developers. CONCLUSIONS This analysis suggests the potential for full financial and commercial viability for a manufacturer pursuing the development and commercialization of a GBS vaccine. Risks exists in relation to the clinical trial design and costs, the level of competition, countries' ability to pay, the administration schedule and the availability of policies that encourage use of the vaccine. To reduce those risks and ensure equitable access to a GBS vaccine, the role of donors or financers can prove very important; as can a coordinated operational research agenda that aims at clarifying those areas of uncertainty.

We investigated the techno-economic analysis of two integrated torrefaction and pelletization systems: (1) Torrefaction befOre Pelletization and (2) Torrefaction After Pelletization configurations to produce torrefied wood pellets. The detailed mass and energy balances and operating parameters were obtained from the process simulation model developed with the base case plant capacity of 100,000 Mg yr−1 using natural gas as an auxiliary fuel source. A discounted cash flow analysis was conducted for both configurations to estimate the capital expenditure, operating expenses, production cost, and the minimum selling price of torrefied pellets. The minimum selling price of torrefied pellets at the plant gate was $207 Mg−1 ($8.5 GJ−1) for the Torrefaction before Pelletization and $197 Mg−1 ($8.1 GJ−1) for the Torrefaction After Pelletization configurations. An increase in the plant capacity of up to 200,000 Mg yr−1 for both configurations decreased the minimum selling price by 10%. The sensitivity analysis of various operational and financial parameters demonstrated that the feedstock cost and torrefaction product yield were the most sensitive parameters influencing the minimum selling price of torrefied pellets. Future opportunities exist to reduce the minimum selling price of torrefied pellets to become competitive to conventional wood pellets and coal.

Mestrado Bolonha em Finanças The present Equity Research consists of the valuation of Accor SA, it contains a detailed financial analysis of the company. The report follows the format recommended by the CFA Institute and is only considered the public information available until the 18th of October 2022. Accor is one of the world’s leading hotel operators and the market leader in Europe, with total revenues of €2,204M, assets of €10,669M and a market capitalization of €7,450M. The Group has one of the most diversified and fully integrated hotel ecosystems in the industry, encompassing luxury and premium brands, midscale, and economy offerings, with a portfolio of 40 brands and 777,714 rooms in 110 countries. The analysis results in a BUY recommendation with a target price of €32.33/share, corresponding to an upside potential of +24% against the closing price of €26.08/share on August 18th, 2022, with high-risk. The Discounted Cash Flows method was used to value Accor, since it is a mature company with stable cash flows. The main model used was Free Cash Flow to the Firm (FCFF). As a complement to the analysis, the Free Cash Flow to Equity (FCFE), Adjusted Present Value (APV), the DividendDiscount Model (DDM) and a valuation using multiples were also performed. The main risks to the recommendation are related to possible unfavorable changes in the geopolitical, health and economic environment. Additionally, the valuation was subject to sensitivity analysis, taking into consideration the risks that may occur and affect the company's performance. A presente projeto consiste na avaliação da Accor SA, que contém uma análise financeira detalhada da empresa do mesmo. O relatório segue o formato recomendado pelo Instituto CFA e é considerado apenas informação pública disponível até ao dia 18 de outubro de 2022. Accor é um dos principais operadores hoteleiros do mundo e líder de mercado na Europa, com receitas totais de 2.204 mil milhões de euros, ativos de 10.669 mil milhões de euros e uma capitalização de mercado de 7.450 mil milhões de euros. O Grupo possui um dos mais diversificados e totalmente integrados ecossistemas hoteleiros da indústria, abrangendo marcas de luxo e premium, ofertas de média escala e economia, com uma carteira de 40 marcas e 777,714 quartos em 110 países. A análise resulta numa recomendação de COMPRA com um preço-alvo de 32.33€/ação, o que corresponde a um potencial de aumento de +24% em relação ao preço de fecho de 26.08€/ação a 18 de agosto de 2022, com alto risco. O método dos Fluxos de Caixa Descontados foi utilizado para valorizar a Accor, uma vez que é uma empresa madura com fluxos de caixa estáveis. O principal modelo utilizado foi o Free Cash Flow to the Firm (FCFF). Como complemento à análise, foram também realizados o Free Cash Flow to Equity (FCFE), Adjusted Present Value (APV), the Dividend-Discount Model (DDM) e uma avaliação utilizando múltiplos. Os principais riscos para a nossa recomendação estão relacionados com possíveis alterações desfavoráveis no ambiente geopolítico, de saúde e económico. Além disso, a avaliação foi sujeita a uma análise de sensibilidade tendo em consideração os riscos que podem ocorrer e afetar o desempenho da empresa. info:eu-repo/semantics/publishedVersion

Mestrado Bolonha em Finanças This Master Final Work (MFW) performs a valuation of “The Navigator Company, S.A” under the format and guidelines of the CFA Institute. The Navigator Company (NVG) is one of the biggest Portuguese companies, dedicated to the production of paper pulp, paper, tissue, and energy with an integrated business model. NVG is the owner of a large forest area and has an important role in the international market of its sector, representing one of the biggest Portuguese companies in the world. The company is a member of the Portuguese index (PSI-20) and its stock are publicly traded on Euronext Lisbon. There are 6 key business areas within “The Navigator Company, S.A”: (i) Research & Development (through the financing of RAIZ), (ii) Forest managing, (iii) Pulp (BEKP) production, (iv) Paper (UWF) production, (v) Tissue and (vi) Energy. NVG was created in early 1950s and has a rich history that is deeply connected to Portugal. These factors were the main drivers for the selection of this company. We achieved the target price using the Discounted Cash Flow model (DCF). To corroborate and validate the model, 3 other valuation methods were used: (i) a relative valuation method - Multiples Valuation, (ii) the Flow-to-Equity model, and (iii) the Adjusted Present Value. With a price target of 4,70 € for 2023YE, a potential upside of 14,1% and a potential upside annualized of 11,5% from the current price (4,12 €), the final recommendation for The Navigator Company, S.A is to Hold with an estimation of High risk for the company. Este trabalho final de mestrado pretende realizar uma avaliação da “The Navigator Company SA” de acordo com as recomendações do CFA Institute. “The Navigator Company SA” é uma das maiores empresas portuguesas, membro do PSI-20 e transacionada na Euronext Lisboa. A empresa tem uma história rica, extensiva e está intimamente ligada com Portugal. Estes foram alguns dos fatores que levaram à decisão para a escolher como foco de avaliação para este trabalho final de mestrado. Para o processo de avaliação foi usado o modelo Discounted Cash Flow (DCF) para se determinar um preço final para 2023YE de 4,70 € o que equivale a uma potencial valorização de 14,1% e uma potencial valorização anualizade de 11,5% face ao preço de referência de 23 de Agosto de 2022. Além do modelo DCF foram também usados 3 modelos distintos para corroborar e validar os valores obtidos através do modelo DCF, nomeadamente: (i) um método de comparação relativo (Multiples Valuation), (ii) o método FTE e (iii) o método APV. Através do método DCF a recomendação final para a The Navigator Company, S.A é de “Manter” tendo em conta que a acção apresenta um elevado grau de risco. info:eu-repo/semantics/publishedVersion

A method for building end-to-end management accounting in a division of the Bank’s subdevision specializing in working with non-core assets is proposed. Has been proposed the process approach, an algorithm for building a database for the formation of key performance and control indicators. Has been described the key stages of the department's work, the attribute composition of entities (set) arriving, enriched and transmitted at each stage of the department's work. By modeling the process has been built a role model, access and editing rights for employees. Data sources (reference books) for optimization and unification of the process of filling the database (tuple) are proposed. A method of accessing the database in the Power Query Microsoft Excel add-in is proposed, which allows you to collect data from files of all basic data types, process and refine the received data. In the interactive programming environment Jupyter Notebook, mathematical and financial models for data analysis (logistic regression, decision tree and discounted cash flow method) were built based on data in order to predict costs, the timing of asset exposure and make a decision on the optimal cost of putting property on the Bank's balance sheet and selling price. Based on ready-made libraries (matpotlib, seaborn, plotly), options for data visualization for management are proposed. Using the example of the Bank's division, the author describes the positive effects and opportunities that open up to the management of different levels in solving day-to-day tasks and planning the activities of the division. A technical task was proposed for the development of a showcase for the sale of non-core assets on the Bank's website as an environment for the accumulation of external data for making flexible management decisions.

The market for space solar power (SSP) is developing. This analysis utilizes a case study of SSP for remote mine operations to determine its economic feasibility. We employ a discounted cash flow (DCF) evaluation and then assess the sensitivity of the DCF model to changes in its underlying assumptions. The results indicate that there are scenarios for SSP where it is considered a viable power alternative. Further, a discussion of the assumed manufacturing and transportation costs decreases to expand the market is given.

Real-world market quotes of bonds can sometimes contradict the no arbitrage principle within the discounted cash flow model. This makes some kinds of no-arbitrage-based analyses impossible, e.g., i...

This research aims at calculating the fair value of shares of pharmaceutical companies listed on the Indonesia Stock Exchange (IDX). The data used in this research is historical data from the 2013-2020 financial statements, which are used as the basis for projections in 2021-2025. The method used in this research is Discounted Cash Flow (DCF) method with Free Cash Flow to the Firm (FCFF) approach and Relative Valuation method with Price to Earning Ratio (PER) and Price to Book Value (PBV) approaches in three scenarios. The three scenarios used are the optimistic scenario (condition above industry growth), the moderate scenario (the most likely condition for the company), and the pessimistic scenario (the average condition of the industry). The results of the research showed that by using the DCF-FCFF method, KAEF and PYFA stocks experienced overvalued conditions in all scenarios. Meanwhile, KLBF and DVLA stocks were undervalued in all scenarios. Then, from the calculation of the Relative Valuation method, each company was still within the industry range in all scenarios. Overall, KAEF stocks were overvalued by 57.817%, KLBF stocks were undervalued by 7.879%, DVLA stocks were undervalued by 370.865%, and PYFA stocks were overvalued by 16.662% both in DCF method and in Relative Valuation method.

This study aims to project the intrinsic value of state-owned banks listed on IDX for the 2021 to 2025 projection. This study uses the Discounted Cash Flow (DCF) method with the Free Cash Flow to Equity (FCFE) approach specifically for banks by looking at the regulatory capital. Meanwhile, it is also used the Relative Valuation method with the Price to Book Value (PBV) and Price Earnings Ratio (PER) approaches. This study uses three scenarios will be used, which consist of a pessimistic scenario (the average condition of the industry), a moderate scenario (the same condition as the company's growth), and an optimistic scenario (a condition above industry growth), which aims to project the stock value over the next five years. The data used in this study comes from historical data during the 2016 to 2020 period. Based on the results, the stock prices of state-owned banks using the FCFE method shows undervalued results for all scenarios. Meanwhile, using the relative valuation method, PBV in the optimistic scenario only shows BBNI undervalued conditions. In addition, in moderate and pessimistic scenarios, only BBRI shows overvalued conditions. Furthermore, PER shows undervalued results for all scenarios.

Economic feasibility analysis is essential in the decision-making process regarding investment in photovoltaic projects. Project profitability must be measured based not only on the costs and revenues, but also on the climatic particularities of the different locations. Therefore, performing simulations of technical and economic performance of photovoltaic models is fundamental. Thus, the objective of this study was to analyze deterministic and stochastic models of investments in two types of photovoltaic systems, one incorporated into the enterprise’s architecture (a BIPV system) and the other, a conventional one, in different Brazilian locations, covering the predominant climatic factors in the country. The methodological proposal consisted of choosing a city in Brazil with each predominant climate type and compiling its data on irradiation, monthly sunshine hours, and tariffs of the electric power concessionaire, to simulate the electrical generation performance of the proposed photovoltaic systems and their profitability. For the economic analysis, the cumulative probability of positive Net Present Value (NPV) returns was obtained through deterministic simulations in all municipalities. Only the municipality of Pau dos Ferros-RN was chosen to perform 10,000 stochastic simulations, and its cumulative probabilities of positive NPV returns were obtained. In both models of photovoltaic technology analyzed and simulation logics, 100% of the NPVs were positive, indicating profitable cash flows in all scenarios. However, some municipalities obtained better results than others when the climate types favored sunny weather. Moreover, although all cases returned positive NPVs, the conventional model proved to be more economically attractive than BIPV system.

In order to maintain the company's ability to fulfill its liabilities, PT. Jasa Marga (Persero) Tbk will takes a corporate action strategy to strengthen capital structure for the Toll Road Subsidiaries (/APJT). APJT selected are PT. Trans Marga Central Java (/PT. TMJ, is the operator of Semarang-Solo toll road) and PT. Jasamarga Surabaya Mojokerto (/PT. JSM, is the operator of Surabaya-Mojokerto toll road) because of its capability to fulfill their solvents. Corporate action strategy done by analyze related with company performance baluation, optimal capital structure analysis. For Company performance valuation, analyze is done with company's financial ratios. From the calculation and analysis of profitability ratios; liquidity ratios and solvency ratios, PT. TMJ and PT. JSM during year 2015-2019 showed fair good performance. The composition of the capital structure to obtain optimal value for PT. TMJ and PT. JSM are range from 60:40 to 30:70 for the composition of debt and equity. The results of the company valuation using Discounted Cash Flow (DCF) method show that the company value of PT. TMJ, with a capital structure composition of 60:40 worth IDR. 25,862,- /share and with a capital composition of 70:30 share value of PT. TMJ in the amount of IDR.10,418,- /share. As for PT. JSM with a capital structure composition of 60:40 is IDR. 2,709,- /share and with a capital composition of 70:30 the share value of PT. JSM is IDR. 911,- /share. From analyze result, Management should pay more attention in capital expense due it’s effect in Optimizing Capital Structure, then from that Optimal Capital structure, APJT can reduce debt portion dan increasing uts equity portion through several strategy

Islamic bank is a bank that collects funds from the public by using system profit sharing for every profit it gets and in carrying out its activities in accordance with Islamic law. Remembering that in Indonesia most of the population is Muslim, therefore they need a bank that works in accordance with Islamic law. Considering the number of percentages of Islamic banks in Indonesia are still small and cannot yet dominate the market share, therefore this research is expected to find out whether the merging of 3 Islamic banks (BRIS, BSM and BNIS) able to control market share or not. To see the synergy resulting from this merger is used methods Discounted Cash Flow - Free Cash Flow to Equity and Relative Valuation - Price to Book Ratio. The data used are the financial statements of each bank from 2014 to 2019 which are available on the Indonesia Stock Exchange (IDX) or the websites of each bank.

This case guides students through the process of preparing a real-life business case. The business case involves capital expenditure analysis for a potential project in the Wally-Mart Supermarkets frozen supply chain. There are three parts to the business case: (1) prepare a financial model in Excel with a discounted cash flow method to analyze relevant incremental capital expenditures, revenues, costs, and profits; (2) concisely communicate the financial model and business case in a business style Word report; and (3) concisely communicate the financial model and business case in a business style PowerPoint presentation. The case materials include a practice financial modeling exercise. The case is suitable for use in undergraduate and graduate management accounting courses.

In this research, a novel technology is proposed that combines chemical looping combustion and methane reforming in order to convert CO2 to value added chemicals. The stoichiometric number is improved via adding assisted steam and utilizing pressure swing adsorption unit. The process simulation is conducted utilizing Aspen plus-V10 simulation software. The new built-in model featured by AspenTech, dubbed Fluidbed, in Aspen Plus is employed to simulate the CLC section. In Aspen Plus flowsheet environment, a hierarchal approach is considered in that the main flowsheet is divided into 5 hierarchy models or sub flowsheets. The process simulation results display that the overall conversions of CH4 and CO2 via this process are 97 % and 87 %, respectively. The heat integration results depict that 138.7 MW heat energy can be saved in the process. The CO2 emission of the whole process per methanol production is 0.1 tCO2/tMe. The estimated capital expenditure, and operating expenditure are US$ 509 million and US$ 159 million/yr, respectively. A discounted cash flow model combined with sensitivity analyses showed that a breakeven point could be reached with a methanol price of US$ 242/tonne. Net present value, internal rate of return, and pay out time are evaluated based on DCF results.

A techno-economic analysis (TEA) was conducted to evaluate the economic profitability and feasibility for a H2 energy storage system using an alkaline and a polymer electrolyte membrane water electrolysis for 1 MW water electrolysis operation. Many economic analysis methods such as itemized cost estimation, profitability analysis using a cumulative cash flow diagram, and uncertainty analysis employing a Monte-Carlo simulation method were utilized to perform a TEA. In particular, a renewable energy certificate (REC) was considered as an additional benefit of a renewable energy use. From itemized cost estimation, respective levelized costs of H2 of 7.21 and 9.19 $ kgH2−1 were obtained for both H2 energy storage systems in an alkaline and a polymer electrolyte membrane water electrolysis by considering current economy situation and therefore it is still difficult to be cost-competitive compared to a commercial H2 production cost. From profitability and uncertainty analysis results, an appropriate REC weight was confirmed in terms of discounted profitability criteria like a discounted payback period, a net present value, a present value ratio, and a discounted cash flow rate of return. In addition, a REC weight was affected on a net present value compared to a REC trading cost fluctuation.

Mestrado Bolonha em Finanças The present document consists of an Equity Research on EDP Renováveis S.A. (EDPR). This report was drafted according with the guidelines from the CFA Institute Research Challenge. Originating from the Portuguese utility EDP, EDPR is today a global player in the renewable energy industry. The company develops, constructs, and operates renewable projects in over 20 countries worldwide. Its farms employ onshore and offshore wind and solar technologies. EDPR’s valuation was conducted through a Discounted Cash Flow model using a FCFF Sumof-the-Parts (SoP) approach in order to capture the different characteristics of each segment in which the company operates. The valuation yielded a buy recommendation with a price target of €24.7/sh for 2022YE, implying a 24% upside from the January 12th, 2022, closing price of €19.9/sh. To provide consistency to this analysis, other valuation methods were used, such as overall FCFF, APV, FCFE, Residual Income and Relative Valuation. As any investment, the acquisition of EDPR’s stock carries some risks, which are fully explained in the report. Even though this report was finalized on January 16th, 2022, an updated research snapshot was conducted to display in the valuation the impacts of Russia’s military invasion of Ukraine, which took place on February 24th, 2022. This update reflects information that was publicly available as of March 20th, 2022. Due to its relevance in the financing of EDPR’s operations in the United States, and considering the limited information on the subject, this document includes a chapter focused on tax equity agreements. In this segment, we studied the yield these agreements provide to investors and estimated the return to EDPR in its future projects when employing this source of capital. Furthermore, we discuss the factors influencing these returns for both tax equity investors and for the developers of renewable energy projects. Moreover, the cost of tax equity for the company was estimated and explained. O presente documento consiste num Equity Research sobre a EDP Renováveis S.A. (EDPR). Este relatório foi efetuado de acordo com as regras do CFA Institute Research Challenge. Proveniente da empresa portuguesa EDP, a EDPR é atualmente um membro internacional da indústria das energias renováveis. A empresa desenvolve, constrói e opera projetos renováveis em mais de 20 países por todo o mundo. Os seus parques utilizam tecnologia eólica, tanto onshore como offshore, e solar. A avaliação da EDPR foi efetuada através de um Discounted Cash Flow model utilizando uma abordagem de FCFF Sum-of-the-Parts (SoP) de forma a capturar as diferentes características dos segmentos em que a empresa opera. Através desta avaliação foi obtida uma recomendação de compra com um preço-alvo de 24.7€ por ação para o final do ano de 2022, implicando um potencial de crescimento de 24% a partir do preço de fecho de 12 de janeiro de 2022, 19.9€ por ação. De forma a proporcionar maior consistência a esta análise, outros métodos de avaliação foram utilizados, tais como FCFF para a empresa como um todo, APV, FCFE, Residual Income e Relative Valuation. Tal como qualquer outro investimento, a compra de ações da EDPR implica alguns riscos, os quais estão explicados detalhadamente no relatório. Apesar deste relatório ter sido finalizado a 16 de janeiro de 2022, foi efetuado um snapshot atualizado de forma a demonstrar os impactos na avaliação causados pela invasão militar da Rússia à Ucrânia, iniciada a 24 de fevereiro de 2022. Este update inclui apenas informação pública até 20 de março de 2022. Devido à sua relevância no financiamento das operações da EDPR nos Estados Unidos da América, e considerando a escassa informação sobre o tema, este documento inclui um capítulo dedicado a acordos de tax equity. Neste segmento, é estudado o retorno que estes acordos proporcionam aos investidores e estimado o retorno para a EDPR nos seus futuros projetos em que utilizar esta fonte de capital. Adicionalmente, são discutidos os fatores que influenciam o retorno criado através destes acordos, tanto para os investidores como para as empresas que desenvolvem os projetos renováveis. Este capítulo também inclui uma estimativa e explicação do custo de tax equity. info:eu-repo/semantics/publishedVersion

Mestrado Bolonha em Finanças A.P. Møller – Mærsk A/S (“MAERSK”) is a global container shipping company that operates worldwide with an integrated services model throughout 4 segments: Ocean, Logistics & Services, Terminals & Towage and Manufacturing & Others. MAERSK owns and operates some of its own ports and terminals as well as provides a complete supply chain management experience to its clients through air freight and intermodal services. Looking forward, MAERSK expects to increase its capabilities within its Logistics & Services segment as well as expand its port and terminal locations. As of 2022, MAERSK is the largest listed logistics company with US$61.8 billion in revenues and US$72.2 billion in assets and the 2nd largest in total TEU carried. MAERSK has a “BUY” recommendation with a 2022YE price target of US$3,928.75, representing a 26.81% upside potential or a 37.71% potential annualized return against the stock price on April 4th 2022 of US$3,098.04. Nevertheless, the stock carries high risk due to its sensitivity towards macroeconomic events and the business cycle. Particularly in the past years, the macroeconomic outlook has been exceptionally uncertain regarding demand for goods relative to services, freight rates, oil prices and other main drivers of valuation for MAERSK. MAERSK’s undervaluation can be explained by the market’s pessimism towards the evolution of such drivers. However, the company experienced a record year in 2021, raising revenues by 55% and EBITDA by 192% which allowed it to raise cash for investment in its strategic plans which include several acquisitions, increase dividends by 112% and announce a large 4-year share buyback program. 2022 is forecasted to be as successful, if not better, than 2021 given the current global outlook, with an already announced 642% increase in dividends and the start of the DKK 64 billion share buyback program. A.P. Møller – Mærsk A/S (“MAERSK”) é uma empresa global de transporte de contêineres que opera em todo o mundo com um modelo de serviços integrados em 4 segmentos: Marítimo, Logística e Serviços, Terminais & Reboque e Manufatura & Outros. A MAERSK possui e opera alguns de seus próprios portos e terminais, além de fornecer uma experiência completa de gerenciamento da cadeia de suprimentos para seus clientes por meio de frete aéreo e serviços intermodais. Olhando para o futuro, a MAERSK espera aumentar suas capacidades em seu segmento de Logística e Serviços, bem como expandir seus portos e terminais. Em 2022, a MAERSK é a maior empresa de logística listada com US$ 61,8 bilhões em receitas e US$ 72,2 bilhões em ativos e a 2ª maior em total de TEU transportado. A MAERSK tem uma recomendação de “COMPRA” com um preço alvo para 2022YE de US$ 3.928,75, representando um potencial de valorização de 26,81% ou uma rendabilidade anual implicita de 37,71% em relação ao preço das ações em 4 de abril de 2022 de US$ 3.098,04. No entanto, a ação apresenta alto risco devido à sua sensibilidade a eventos macroeconômicos e ao ciclo de negócios. Particularmente nos últimos anos, as perspectivas macroeconômicas têm sido excepcionalmente incertas em relação à demanda por bens, taxas de frete, preços do petróleo e além de outros fatores importantes na valorização da companhia. A atual subvalorização da MAERSK pode ser explicada pelo pessimismo do mercado em relação à evolução desses fatores. No entanto, a empresa viveu um ano recorde em 2021, elevando as receitas em 55% e o EBITDA em 192%, o que lhe permitiu levantar caixa para investimento em seus planos estratégicos que incluem aquisições, aumentar os dividendos em 112% e anunciar um grande programa de recompra de ações de duração de 4 anos. Prevê-se que 2022 seja tão bem-sucedido, se não melhor, do que 2021, dadas as atuais perspectivas globais, com um aumento já anunciado de 642% nos dividendos e o início do programa de recompra de ações de DKK 64 bilhões. info:eu-repo/semantics/publishedVersion

The Heineken N.V. is a multinational brewery operating in 4 regions worldwide. Being the 2ndlargest company operating in the Beer Market, it is expected to continue to follow the global trends that characterize the industry, mainly the shift towards low and non-alcoholic beers, expanding the premium and the craft segments. However, there are some factors that can restrain this growth, especially in the short-term. Despite the world economy is slowly recoveringfrom Covid-19, some markets arestill being affected, such as China. The inflationary environment and the current conflict in Eastern Europe are rising operating costs, and reducing consumers’ disposable income. These factors were taken into consideration when developing expectation about Heineken’s future performance in each region where it operates. It was performed a DCF valuation for Heineken in December 2022, reaching a price per share of 97.77€.As such, a HOLD recommendation is the outcome of the valuation.

This study compares profitability and risk of conventional and cage-free egg production in the United States. Evaluating cage-free production is particularly relevant given ongoing consumer driven changes and new cage-free legislation. Results show that while the Modified Internal Rate of Return (MIRR) for conventional production is above an estimated industry opportunity cost of capital, cage-free production’s MIRR does not fully satisfy investors’ expectations. The MIRR of cage-free investment, between 5.6% (deterministic model) and 8.0% (stochastic) per 15-month flock, is below the 9.4% opportunity cost of capital. In addition, the simulations show that there is a 90% probability of conventional production’s MIRR falling between 18.5 and 20.3% per 15-month flock, and cage-free egg production’s MIRR ranging from 6.8 to 9.4%. In order for cage-free to be as equally profitable as conventional production, cage-free egg prices at the farmer gate should be 74% over conventional egg prices. Such high cage-free egg prices are highly unlikely to occur given recent cage-free price premia and consumer willingness to pay estimates from recent research. This study provides a framework egg producers can use to evaluate the potential effects of changes in their portfolio of products (i.e. conventional and cage-free mix) as they accommodate production schedules in this evolving industry.

The method of discounted cash flows (DCF) is one of the main and popular methods of economic assessment of business, which is used all over the world. However, the actual behavior of business projects evaluated by this method often differs from that predicted, and the difference can be tens of times.It should be noted that at present, the discounted cash flow method is a subject of extensive literature, but there are no analytical arguments for large discrepancies between the theory and practice of the method. The aim of the study is to provide a theoretical explanation of the forecasting errors inherent in the discounted cash flow method. The research method is related to the analysis of the traditional method of discounted cash flows, which shows that the key indicator that affects the final result is the net income for a certain period of time. Analyzing the economic content of the flows that appear in the formation of net income, we can conclude that for a trade-type enterprise, the cash flow of receipts associated with current operations is significantly random and, therefore, requires the use of stochastic description methods.The paper offers a mathematical model of the mentioned cash flow. It is assumed that the event associated with a purchase (cash receipt) is modeled on the time axis by a point with a random time of occurrence. Then, obviously, the number of points n that appear on a fixed time interval will be a random number. A justification is given for the fact that the point process is a Poisson random point process or simply a Poisson point process, in which the times of occurrence of points W1 ,W2 , ..., Wi and their number N(t) at time t are random variables. We introduce the function λ(t), which characterizes the average number of cash receipts (purchases) per unit of time. From an economic point of view, it is driven by consumer preferences of buyers, and from a mathematic point of view it is a function of the intensity of appearance of points of the Poisson process. The monetary values of purchases made by customers are described by random positive ui values which arise at the Wi moments of the occurrence of shopping events, simulate a random process of cash receipts at the enterprise.Introduction to the consideration of the random Poisson flow of business receipts and their values, which are also random positive values with an arbitrary probability distribution, is the key assumption of the work. The proposed approach allowed us to develop a stochastic model of the company’s revenues, generalize the method of discounted cash flows, obtain a number of simple ratios, and on this basis explain the growth of the method forecast error with an increase in the duration of the forecast horizon.New results of the study are the use of stochastic methods to describe business revenues and expressions obtained on this basis for the variance and standard deviation of the company’s net cash flow, depending on the number of forecasting periods. It is shown that the growth of the standard deviation of the net cash flow, i.e. the forecasting errors, is a fundamental feature of the method in this interpretation. For the initial estimates, a simple expression is obtained and corresponding graphs are given.In conclusion, it is noted that the presented graphs of the behavior of the standard deviation of the method estimates show that the estimate from below of the mentioned deviation slowly grows with an increase in the number of prediction periods and depends only on the number of periods. It is noted that this growth is calculated in relation to the first forecast period, which itself may contain errors, and it is determined only by consumer preferences. Of course, you can choose the forecast period not a month, but, for example, a year, but then the error of the first period will be significantly increased. Thus, this review makes it possible to explain some aspects of the growth of the error of the discounted cash flow method with the forecast time.

In recent years, On-orbit servicing (OOS) is in the ascendant, attracting attentions of a growing number of institutions and commercial space companies. The sustainable development of OOS is heavily relied on its economic benefits. However, the economic feasibility of OOS is not sufficiently analyzed in the existing studies. Based on this, a general economic value analysis framework for OOS is proposed in this paper. Firstly, the maximum price that clients would be willing to pay is obtained by real option method through comparing values of OOS by an alternative scheme. Secondly, the minimum price that the servicer could afford is predicted by Discounted Cash Flow (DCF) method, which is based on a service provider value model. Six necessary factors are considered in this model at the same time, including servicing architecture and its initial construction cost, mission related depreciation, income tax, operating expense, monetary value, as well as technical risks and the corresponding insurance premium. Then, the above two prices are compared to analyze the economic feasibility of OOS. Finally, mission cost, pricing strategies and OOS value drivers are modeled and discussed within the estimated acceptable price range. The results show that the OOS is commercially viable when the initial costs of geosynchronous communication satellites and the servicing architecture are more than $242 M and less than $140 M respectively. The applicability and usefulness of the proposed method are demonstrated by an actual business case analysis of the Mission Extension Vehicle-1 (MEV-1).

Long-term open pit mine planning is a complex process which deals with numerous uncertainties, whether they are economical (commodity price, operational costs, production schedule, discount rate, inflation, among others); geological (grade distribution, density, hardness, etc); or physical constraints (property limits, environmental issues, legislation, etc). In this context, this paper aims to evaluate the effects of the variation of two important variables: commodity price and discount rate, with regard to the economic criterion, represented by the Net Present Value (NPV) of the mining business. Starting from a baseline value of US$ 80/t, the commodity (phosphate rock was used as a case study) price was varied within a 50% range, above and below the baseline value, obtained from historic values from the last 5 years. The discount rate values adopted in the analyses were 6%, 8%, 10%, 12%, 14%, 16%, 18% and 20%. The results showed increases in the market price yielded higher NPV and life of mine values. On the other hand, it was noted that increases in the discount rate can significantly alter the NPV, materially reducing the value of the mining undertaking. It is also worth noting that, in contrast to more robust approaches such as Real Options Theory (ROT), traditional Discounted Cash Flow (DCF) methods, such as NPV, assume variables, such as commodity price, to be fixed, which could either lead to the undervaluation or overvaluation of a project.

In any context where a discounted cash flow valuation is required, there is the issue of estimating the continuing value. The most common way to do that is to assume that by the terminal horizon the company is in a steady state and is growing at a constant rate. The issue is how to handle inflation. The problem is that it is often done wrong and the impact is typically material. Because there remains significant confusion, in this paper we simplify the analysis by isolating the two key issues and providing example calculations. We show that even at the current 2% level proper treatment of inflation has a sizeable impact on valuation. If inflation were to accelerate as a result of current monetary and fiscal policies, the significance of this issue will increase.

International audience; The circular economy is calling for the rapid use of already-developed renewable energies. However, the successful implementation of those new fuels is limited by economic and political issues. For instance, in the Brandenburg region, Germany, biogas production from anaerobic digestion of biomass and wastes is a current alternative. However, the upgrading biogas to biomethane is still challenging and the economic viability is unknown. Therefore, we performed an economic analysis for biogas upgrading to biomethane in the Brandenburg region. Five biogas plant sizes were analyzed by the method of discounted cash flow. This method yields the net present value of the projects, thus revealing the profitability or non-profitability of the plants. Results indicate profitable outputs for medium and large plants, with net present values between 415 and 7009 k€. However, the smallest plants have net present values from -4250 to -3389 k€, thus needing further economic efforts or subsidies to reach profitability. Indeed, biomethane prices should range between 52.1 and 95.6 €/MWh to make these projects profitable. Combinations of 50% of investment subsidized and 11.5 €/MWh feed-in tariffs subsidies could make the projects reach profitability. These findings reveal that political actions such as green policies and subsidies are needed to implement green energy. This case study should serve as a potential tool for policy-makers toward a sustainable bioeconomy.

Objetivo: A empresa Magazine Luiza, fundada em novembro/1957, ícone do varejo nacional, abriu seu capital em 2011 na B3, com crescimento exponencial na valorização de suas ações. Este caso proporciona os seguintes objetivos pedagógicos: a) promover a análise de problemas, propor e indagar decisões em relação à valuation; b) estimular a reflexão entre a teoria que sustenta os propósitos de avaliação e a forma como ela deve ser desenvolvida e aplicada; c) ampliar a capacidade de relacionar os pressupostos teóricos de valuation e a sua adequação à realidade. Metodologia: As Demonstrações Contábeis foram extraídas do site da empresa MGL, na Economática® e no site da B3. Também foi utilizada a base de dados do professor Damodaran. Destaca-se que os dados são reais, porém, em contrapartida, considera-se como situação hipotética a existência da empresa Alpha Varejo e sua proposta de aquisição da empresa Magazine Luiza. Resultados: Sob o ponto de vista comportamental, permite que estudantes e docente tenham diálogos e discussões saudáveis de modo que haja respeito mútuo às opiniões e ideias divergentes, permitindo a exposição de seus pontos de vista. Estimar o valor da empresa pelos métodos do Fluxo de Caixa Descontado e Avaliação Relativa é uma tarefa complexa, e pode ser considerada como um processo importante para tomada de decisão, principalmente para o acionista da empresa. No uso dos métodos, reside a necessidade de escolhas de premissas adequadas que melhor refletem a realidade da empresa. Contribuições do Estudo: A realização da atividade proposta, com estudantes de graduação ou pós-graduação na área de negócios em disciplinas voltadas para análise de viabilidade financeira de empresas e valuation, contribui para a formação destes estudantes com desenvolvimento de análise crítica e estímulo à discussão na área de finanças.

Estimating growth in net cash flows is one of the key components in applying the discounted cash flow (DCF) method in valuing any company, reporting unit, or other business unit. This paper explains the underlying assumptions of the DCF method and demonstrates how to compare the most commonly used basis for estimating net cash flows (sometimes referred to as free cash flows), expected organic growth, to historic estimates of growth of the subject company and estimates of earning growth commonly prepared by security analysts.

The aim of this study is to determine the impact of the quality of accounting information on the cost of capital in the firms listed on the Pakistan Stock Exchange (PSX). The study focuses on the fundamental qualitative attributes of accounting information mentioned in the Statement of Financial Accounting Concepts (SFAC) No. 8. These attributes comprise predictive value, neutrality, completeness and free from error. The cost of capital is measured using the discounted cash flow technique. Very few studies have been conducted using the discounted cash flow technique in relation to emerging stock markets, as compared to developed stock markets. Data were collected from the companies belonging to the non-financial sector of the PSX from 2001 to 2019. The regression analysis results showed that the attributes of accounting information—predictive value, neutrality, completeness and free from error—impact the cost of capital in the PSX. A systematic pattern analysis of risk-adjusted portfolio returns also revealed that these qualitative attributes are genuine risk factors and are not created by chance due to the inefficiency of the market. A policy implication of this finding is that potential investors should consider the qualitative attributes of accounting information before making their investment decisions.

Traditional valuation models such as the Gordon growth model, the discounted cash flow (DCF) model, and the real option approach assume that cash flows are perpetual. There is no firm that lasts forever. In the expected time to ruin model, the underlying firm has an expected termination date. In an efficient market, stock prices should reflect all available information. Adapted from a revised valuation model, the authors solve for the implied mortality (IM) of an underlying firm given its equity market price. The authors investigate IM for securities during the last few crises. The existence of IM may be the missing piece of the unexplained volatility puzzle. TOPICS:Financial crises and financial market history, exchange-traded funds and applications, security analysis and valuation, tail risks Key Findings ▪ Most valuation models of the firm assume that cash flows are perpetual. Of course, this is incorrect. By applying the Expected Time to Ruin Model, we solve for the Implied Mortality (IM) of an underlying firm given its equity market price. ▪ IM would be a useful and easy tool for the credit market trading. High leverage firms such as those in the financial industry suffered more during the crisis. We investigate the last three crises and different degrees of impact on them. ▪ The change in IM may be the missing piece of the unexplained volatility puzzle or so-called “Irrational Exuberance.”

The evaluation of investment projects has been carried out mainly through the analysis of Discounted Cash Flow (DCF), whose financial feasibility measures have been based fundamentally on approaches such as the Net Present Value (NPV) and the Internal Rate of Return (IRR), which are widely discussed in the field of energy project valuation. Despite this, the classical methods have a limitation when perceiving relevant characteristics for decision-making in high-risk investments, such as the uncertainty of the cash flows and the quantification of risk. An alternative to the use of these methods is the technique known as Decoupled Net Present Value (DNPV), which decouples the risk associated with the project from the value of money over time. This valuation methodology was applied to a photovoltaic solar energy self-generation project in Colombia. In this study, the results obtained through the DNPV was equivalent to 2.3-fold the value obtained by means of NPV. Thus, many renewable energy projects can become undervalued since traditional methods mistakenly associated a discount rate that includes a very high risk premium and that in many occasions it is more related to the sources of financing of the project instead of representing the risk component that it has.Keywords: Decoupled net present value (DNPV), Renewable energy projects, Solar energy investmentsJEL Classifications: Q2, Q4DOI: https://doi.org/10.32479/ijeep.10577

A large-scale hydrogen supply chain is an alternative for the transportation of energy generated from a renewable energy source. Utilizing this technology would drastically improve the generation of clean energy. Therefore, an analysis method to estimate the economic and environmental benefits of the introduction of a hydrogen supply chain using an existing pipeline is developed. The proposed method first estimates the energy and exergy flows in the system to calculate the overall efficiency of these quantities. Afterward, the payback period is estimated based on the overall energy efficiency using the discounted cash flow (DCF) method. The overall efficiency of the system, based on the energy analysis presented, would seem to be the final delivered electrical, fuel and useable heat energy delivered to end use divided by the input solar and wind energy. Furthermore, the environmental effects due to the introduction of the systems are evaluated considering the reduction of global warming and air pollution gases, such as CO2 and PM2.5. The proposed analysis method was applied considering a natural gas pipeline that connects Qinghai and Shanghai. As a result, conversion ratios of 24.9% for electricity and 17.5% for heat were achieved, with the overall efficiency of the system of 42.4% based on the electricity obtained from photovoltaics. 3.02 Gt of CO2, 104 kt of SOx, and 134 kt of NOx, which represent 3.3%, 0.5%, and 0.6% of the annual discharge in China, respectively, and 8.66 kt of PM2.5 would be reduced every year. Furthermore, a reduction of 953 Mt in coal consumption is expected. The payback period of the proposed system using the DCF method is 4.17 and 2.28 years for the two alternatives evaluated in this work. The cash flow of the DCF is influenced by installation cost and operation cost of equipment.

The paper seeks to develop a comprehensive framework to cross-border discounted cash flow valuation. Although the literature on company valuation and on international financial management is vast, such a framework has not yet been proposed. We build upon well-known fundamentals and relevant contributions, e.g. on the derivation of the risk-adjusted rate of return. Relevant risks are exchange rate risk, business risk, financial risk, the risk of the tax effects induced by debt financing, and the risk of default. Additional tax effects beyond the well-known tax shield on interest expenses must be considered. Risk discounts from cash flows and risk premia to be added to risk-free interest rates are derived according to the global capital asset pricing model. A conceptual choice occurs not only between the foreign currency and the home currency approach, but also regarding the estimation of future exchange rates. The paper shows how a valuation can be implemented with or without consideration of covariances between cash flows and rate of returns with exchange rates. It also derives the discount rates if forward exchange rates are applied. We discuss the consequences of assuming the uncovered interest parity to hold. We assume deterministic debt and apply the adjusted present value approach. In addition, we derive the RADR to be used in the flow to equity and weighted average cost of capital approach. The paper addresses not only the valuation of a foreign company, but also the valuation of a domestic company that generates cash flows in foreign currency and/or uses debt in foreign currency.

Este trabalho de projeto tem como objetivo fazer uma equity research ao Pestana International Holdings S.P.G.S, S.A. que é uma multinacional portuguesa não cotada em bolsa que tem atividade em várias áreas de negócio, com a finalidade da obtenção do valor do preço alvo para as suas ações. Para a execução da avaliação foi feita uma investigação dos métodos possíveis a utilizar dos quais, o discounted cash flow foi o escolhido sendo a avaliação feita mais detalhadamente com o free cash flow to the firm. Com a avaliação feita foi possível apurar que o Grupo Pestana possui um valor de capital próprio de 1 079 552 031 € e um preço alvo por ação de 4,54 €. Através da análise de sensibilidade observa-se que o valor unitário por ação poderá variar entre um mínimo de 2,78 € e um máximo de 5,66 €. This project work aims to make an equity research to Pestana International Hol-dings S.P.G.S. S.A. which is a Portuguese multinational not listed on the stock exchange that has activity in several business areas, with the purpose of obtaining the target price value for its shares. For the execution of the evaluation, an investigation was made of the possible methods to be used from which, the discounted cash flow was chosen, and the evaluation was made in more detail with the free cash flow to the firm. With the evaluation made it was possible to establish that the Pestana Group has a equity value of 1 079 552 031 € and a target price per share of 4,54 €. Through sensiti-vity analysis, we observed that the unit value or action may vary between a minimum of 2.78 € and a maximum of 5.66 €.

The financial evaluation of renewable energy sources (RES) projects is well explored in the literature, but many different methods have been followed by different authors. Then, it is important to understand if and how these methods have been changing and what factors may have driven new approaches. Therefore, this article aims to explore the publications on the financial evaluation of RES projects from 2011 to 2020 and to present a critical analysis of the reviewed literature. The methods for evaluating RES projects were grouped into four categories: (i) traditional metrics based on net present value, internal rate of return, and payback period; (ii) levelized cost of electricity; (iii) return on investment approach; and (iv) real options analysis. A quantitative analysis was carried out considering aspects related to the relevance of the authors, productivity by country, and the most relevant journals for each of these groups. Then, a qualitative analysis of the main characteristics of the five most cited articles in each group was conducted. The results show that the more traditional methods are still widely used for the financial evaluation of RES projects. However, approaches based on the levelized cost and real options have been growing in importance to tackle the complex features of financial evaluation and comparison of RES projects., (undefined)

This equity research analysis of the UK's telecommunications incumbent British Telecom aims to understand its business model and key implications. Such research starts by stressing out the pay out policy to properly advise the investor, later arriving at the operating segments where the company's incoming change on fiber rollout and spectrum acquisition will essentially be felt. After studying the competitors according to the economic framework, one can adequately address the revenue breakdown for the aforementioned divisions. Once BT enjoys a decent tax deal in the short term, it is crucial to understand the cost of capital. After getting acquainted with the core creation drivers, one suggests a recommendation based on a Discounted Cash Flow analysis. The recommendation is strengthened with comparables and sensitivity analysis.

This equity research aims to study British Telecom PLC to assess the viability of investing in the British telecommunications industry. After determining the company's main pillars to be followed, one will understand the key value drivers of the company's business: fiber rollout and spectrum acquisition. Once observing the specific customer-facing units where such improvements will be testified, one will determine main costing and investment strategies, not forfeiting the pension plan analysis. To terminate, one can get acquainted with the cash flow policy while resorting to the main value creation drivers. Relying on a Discounted Cash Flow analysis to forecast a recommendation, one complements the analysis by resorting to a scenario analysis to understand potential market variations.

This case study is focused on corporate valuation from the angle of financial distress, bankruptcy, and restructuring. It makes use of both intrinsic and relative approaches to corporate valuation. This section will only cover the last. Based on Kodak’s and their comparable companies’ financial data for 2011 and 2015, we discuss the Comparables method reliability and come to the conclusion that companies in distress are very difficult to vale by comparison when their competitors are healthy. Both pre-bankruptcy and post-bankruptcy results were inaccurate: Kodak was evaluated as overrated in imminent bankruptcy and undervalued when performing above its reorganization plan’s expectations.

The potential for a pivot drew investors and the public ́s attention to this centenary giant. The present case study aims to tackle the topics connected to Financial Distress, Bankruptcy, and Restructuring by focusing on :Financial Ratio Analysis, Intrinsic and Relative Valuation, and Altman Z-Score Model. Failing to innovate led Kodak to fall into turbulent times, filing for Chapter 11 at beginning of the decade, announcing a shift in its operations towards the pharmaceutical industry eight years later, and an ongoing investigation for wrongdoing are some of the main aspects analyzed throughout the case and how they impacted Kodak.

Den globala utvecklingen som pågått sedan 1950-talet har resulterat i drastiska klimatförändringar vilket orsakat allvarliga miljöproblem. Dessa miljöproblem beror till stor del på en kraftig befolkningstillväxt. Befolkningstillväxten är starkt förknippad med ökade energibehov vilket ställer högre krav på hur energin produceras för att minska avtrycket på miljön. Ett tydligt steg i rätt riktning är tillämpningen av förnyelsebara energikällor. På den svenska marknaden är solkraft den energikälla som vuxit kraftigast de senaste åren. En av anledningarna till den kraftiga tillväxten är de statliga stimulanserna som givits. Sedan 2021 har de statliga stöden samtidigt dragits in vilket i synnerhet drabbar företag, däribland kommersiella fastighetsägare. Samtidigt kan det fortfarande finnas motiv för att investera i solceller, tack vare de positiva kostnadseffekter som en investering kan medföra. Det finns samtidigt oklarheter kring hur denna typ av investering påverkar värdet på fastigheter. Baserat på detta är studiens syfte att undersöka hur investeringar i solceller påverkar det ekonomiska värdet på kommersiella fastigheter samt hur detta värde maximeras med avseende på dimensionering respektive finansiering. Tidigare forskning inom området indikerar att det i huvudsak finns positiva samband mellan investeringar i solceller och värdet på fastigheter. Samtidigt berör dessa studier bostadsfastigheter på den internationella marknaden. Det finns således en begränsad forskning kring hur investeringar i solceller påverkar värdet på kommersiella fastigheter, inte minst på den svenska marknaden. För att uppfylla studiens syfte tillämpades, i första hand, en kvantitativ flerfallsstudie där 8 fastighetsobjekt undersöktes. Den kvantitativa data som samlades in om dessa objekt låg till grund för värderingen av dessa fastigheter. Värderingen, som baserades på “discounted cash flow method”, tillämpades för att tydliggöra hur värdet på fastigheterna förändrades i relation till ett ursprungsläge före en investering. Det kvantitativa metodvalet kombinerades med kvalitativa intervjuer vars syfte var att få en djupare förståelse om hur värdet på kommersiella fastigheter maximeras med avseende på dimensionering. Intervjuerna hade även för avsikt att verifiera de kvantitativa resultaten som genererades från fallstudien. Studiens resultat påvisar ett starkt samband mellan det ekonomiska värdet på kommersiella fastigheter och investeringar i solceller. Hur mycket fastighetsvärdet påverkas beror i stor utsträckning på hur investeringen finansieras samt hur lång analystid som beaktas. Bortsett från analystid tyder studiens resultat på att fastighetsvärdet i genomsnitt ökar 1,71% vid en direktfinansiering och 1,12% när investeringen görs i form av ett “power purchase agreement”. Samtidigt påvisar de kvalitativa resultaten att dimensioneringen av solcellsanläggningar bör göras utifrån den individuella fastighetens behov i termer av egenanvändning och total elanvändning. För att maximera egenanvändningen och därmed också fastighetsvärdet behöver dimensioneringen, ur et praktiskt perspektiv, ta hänsyn till den tillgängliga takytan, takets lutning samt takets väderstreck. The global development, which has been going on since the 1950s, has resulted in drastic climate changes, which has caused serious environmental issues. These environmental issues are mainly caused by a strong population growth. The population growth is participially associated with increased energy needs, which sets higher requirements on how energy is produced, in order to reduce the impact on the environment. A step in the right direction is the application of renewable energy sources. In the Swedish market, solar power has been the fastest growing energy source in recent years. One of the reasons for this growth has been the stimulations offered by the government. Since 2021, the stimulations have been withdrawn which particularly affects companies, including commercial property owners. However, there may still be motives for investing in solar cells, thanks to the positive cost effects that an investment may bring. At the same time, there are uncertainties about how much this type of investment can affect the property value. Based on that, the purpose of this study is to investigate how investments in solar cells affect the economic value of commercial properties and how this value can be maximized with respect to dimensioning and financing, respectively. Previous research within this field indicates that there are positive relationships between investments in solar cells and the value of properties. At the same time, these studies concern residential properties on the international market. Based on this, there is limited research on how investments in solar cells affect the value of commercial properties, especially in the Swedish market. To fulfill the purpose of the study, a quantitative multiple-case study was applied, in which 8 real estate objects were examined. The quantitative data collected about these objects was the basis for the valuation of the properties. The valuation, which was based on a discounted cash flow method, was applied to clarify how the value of the properties changed in relation to a scenario before an investment was made. The quantitative method was combined with qualitative interviews whose purpose was to get a deeper understanding of how the value of commercial properties is maximized with respect to dimensioning. The interviews were also intended to verify the quantitative results generated from the case study. The results of the study indicate a strong relationship between the economic value of commercial properties and investments in solar cells. How much the property value is affected depends to a considerable extent on how the investment is financed and how long analysis time is considered. Apart from the analysis time, the results of the study indicate that the property value increases on average by 1.71% in case of direct financing and 1.12% when the investment is financed as a power purchase agreement. At the same time, the qualitative results indicate that the dimensioning of a solar cell system should be done based on the individual property needs, in terms of self-use and total electricity consumption. To maximize the self-usage, and thereby also the property value, the dimensioning needs to consider the available roof surface, the slope of the roof and the latitude of the roof.

This chapter addresses relative valuation (i.e., market-based) methods, asset-oriented methods, real options analysis (i.e., contingent claims), and replacement cost, often used as alternatives to discounted cash flow valuation. Relative valuation methods include comparable company, comparable transactions, comparable industry techniques, and value driver-based valuation. Asset-oriented methods include tangible book value and liquidation- or breakup valuation techniques. This chapter also discusses in detail how to look at merger and acquisition (M&A) valuation in the context of real options and concludes with a summary of the strengths and weaknesses of the alternative valuation methods (including discounted cash flow) and when it is appropriate to apply each methodology.

Risk is a significant phenomenon in mineral industries due to several associated social, environmental, technical, and financial uncertainties. Risk assessment is a standard procedure that evaluates the effects of uncertainties on a mining project. To deal with technical and financial uncertainties, the most well-known risk assessment technique is the Monte Carlo simulation (MCS), which requires reproducing correlations between uncertain variables. Correlation does not imply causation, but it does provide information regarding how uncertain variables interact. Given that samples generated in MCS are used in a transfer function (e.g., to produce net present value), transfer function values may mislead risk assessors if the interactions are not reproduced. This study uses historical reference data to compare MCS outcomes based on Pearson and copula correlations with regard to their ability to reproduce interactions. Furthermore, results from a case study on a gold mining project—including gold price, production cost, grade, and recovery as well as interest rate as uncertain parameters—show that if the associations between the variables are non-linear, copulas capture interactions and correlations more accurately than Pearson.

In the literature, the integration of the cash and risk effects of executive compensation into company valuation is discussed only marginally. This paper addresses the question of how these effects can be integrated into corporate valuation. Several methods for solving the problem are discussed and a method free of circular references, similar to the adjusted present value approach to company valuation, is identified. Contrary to a common assumption in the literature, there is no uniform and constant cost of capital for a company that uses employee stock options. Cost of capital needs to be adjusted to the cash and risk impact of equity-based executive compensation. Making recourse to the treasury stock method, which is used to calculate diluted earnings per share, is not recommended here even though a corrected version of this method is used. I discuss different forms of equity-based executive compensation, including the resulting allocation of risk and net present value between owners and managers.