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代写留学生作业,Valuation Discount Model
发表日期:2013-09-11 09:18:20 | 来源:assignment.cc | 当前的位置:首页 > 代写留学生作业 > 正文
Valuation Discount Model

Introduction

Valuation is the process of approximating the fair price of a financial asset or liability. According to finance, valuations can be done in assets like stocks, options, patents, trademarks or business firms or liabilities like in bonds contingent liabilities, warranties and leases. There is a great deal of significance in valuation. It assist in analyzing the investments, budgeting for the capital, preparing mergers and even acquiring various forms of transactions, giving various financial reports, taxable burden and litigation of cases.

Valuation can be done using various methods like discounted cash flows which determines the value of the company basing it to predicted future cash flows. The opportunity cost of capital is evaluated in comparison to the risk and returns. This method will compensate the investor more in case exists more risks. The value of the company is computed only for similar companies by looking the prices of related firms.

Dividend Discount Model of business valuation refers to a system that approximates the value that a collection should be doing business at by finding the current value of all prospect dividends. The mock-up assumes that dividends will develop at a stable rate and that development will persist for an endless time. It also presumes that the requisite rate of return is higher than the countless expansion rates. Residue Income Valuation model has two components: the current book value of equity and the present value of upcoming residual income. While discounted free cash flow model is based upon the premise that the only cash flows received by stockholders is dividends. Even if modified version of model whereby stock paybacks are treated as dividend may disvalue firm hence causing less or more than the can to its stakeholders.

Dividend Discount Model (DDM)

This is where the stock's price is valued by using predicted dividends, and discounting them to present value. It should be noted that if dividend discounting model is higher than what the shares are being exchanged the stock is undervalued.( Ohlson E, & Firthlow, G 2005 )

Value of stock = dividend per share (dps) / Discount Rate - Dividend growth rate

That is stock price = Div/(r - g)

This equation is the one used to find the value of capital by making r the subject of the formula. i. e. r = (Div/stock price) + g

Where g is the assumed growth rate of dividend

Div is the dividend given and

r is the rate of discount.

From the equation above it is evident that, rate of discount cannot be less than growth.

Disadvantages

This model is more conservative: This is because the share of stock is valued to its present value of its future dividends rather than its earnings.

The dividend discount model can be applied successfully only when a corporation is already distributing a significant amount of salary as dividends. But eventually earnings turn into dividends. That's because once a company reaches its maturity it won't need to reinvest in its expansion, so administration can begin handing out cash to the shareholders.

The manager may follow some vague acquisition to satisfy his distended ego. This may be as a result of conservatism.

Subjective contributions can lead to unparticular models and poor results

Over-reliance on a assessment that is the core to an estimate

Elevated understanding to minute variation in input assumptions

Advantages

There is flexibility when approximating the future dividend calculations.

It gives valuable estimations even when inputs are excessively made easy

Can be inverted so that the present stock value can be used to charge market assumptions for expansion and predicted return

Shareholders are able to suit their model to their anticipation rather than force-fit hypothesis into the model

Underlying specified assumptions that gives way for sensitivity examination and scrutinizing market responses to changing conditions

Comparing discounting free cashfows to equity with the modified dividend discounting model

The supply paybacks (return of excess cash accumulated largely as a consequence of not paying out free cash flows to equity as dividends)will embody curved out computes of what companies can give back to their stockholders over time as dividends.

Residual income valuation model (RIVM)

Residual income refers to the net income less charge for common shareholders' opportunity cost which is used to produce net income. Some authors refer it as valuation approach, economic profit and abnormal earnings.

Advantages of Residual Income Valuation Model

Terminal value is a comparatively less part of current value

It requires the only available data to prepare accounting transactions

The companies which either pays dividend or don't pay can use this model

This model is appropriate even when cash flows are changeable in the company. That is to say that

It mainly focuses on the economic value of the asset

A company does not pay rewards if bonuses are not expected

Free cash flow is unconstructive over a contented forecast horizon hence the need to use residual income valuation model in valuation of properties.

There is high unpredictability in estimating terminal values

Disadvantages of residual income valuation model

Since it uses already available accounting data that has been manipulated then it may fail to give accurate results.

When alterations are available, accounting data may require some adjustments failure to which unreliable information is attained.

This model needs a clear excess relation to hold that is to say that all manipulations to residue value other than possession transactions run throughout the earnings

It is hard to predict book value and return on investments for the firm.

There are immense departures from spotless excess accounting.

Discounted Free Cash flow models (DFCFM)

The prospect cash flow set is dogged to estimate time and a continuing worth that signifies the cash flow torrent after the forecast period. This can be divided into two that is free cash flow to equity discount models; based on the argument that the only cash

Flow received by stockholders is dividends. To measure how much to give to stockholders in form of dividends the quantity of cash available to be paid to stakeholders after reinvestment needs are met. It should be noted that increases in working capital reduces firms' cash flows and in case working capital reduces the cash flow available to stockholders in creases. The second is discounting to free cash flow to firm model. Usually done to firms with high leverage and expect to go reducing their value with time. The firm may decide to do this because debt payments must not be factored and the cost of capital may not be varying with time. (Olson E, & Firthglow, G 2005)

This can be classified as growth model which should be applied only when cash flows are positive.. Two stage models must be used only when the company is growing at a moderate rate (more than 8% of the constant development rate) and three stage models must be applied only when the company is developing at a higher than stable speed (Kaplan F, & Rubak 2000b)

Advantages of using discounted free cash flow models in valuation

Better for the firms which pay substantial dividends which are more than the free cash flow to equity. Dividends can be substantial if they are less than 75% of free cash flow for equity or dividend are greater are more than free capital for equity. (Herning, et al 2007)

It is appropriate for the firms which free cash flow are hard to estimate, for instance, in banks and other financial companies.

It is not easy to change dividend value in free cash flow model

The investor is able to receive his dividends and he trust with the company

Dividend per share is commonly available

Earnings per share is commonly available this shows that the returns are high.

Earnings should symbolize both cash flow and the sum that can be compensated out as dividends

Free cash flow is less subject to handling than wages.

Disadvantages

Companies are typically able to disburse additional dividends than they really do, so the gauge is often too conventional

Dishonest administration can influence reported earnings to benefit them and even misuse some funds.

Investors are never given benefits as a ready money run.

Not broadly detailed. Because future cash flow is the one used to determine the present

Shareholders do not receive free of charge cash flow.

Comparing and contrasting when each model is appropriate

Dividend discount model does better:

When growth rate in company's earnings is constant i.e. (growth of the firm in economy is more than 1% Kaplan F, & Rubak 2000b)

When bonuses are close to free cash flow to equity or future cash flow to equity is hard to calculate.

When leverage is unwavering

When growth speed of company earnings is sky-scraping

Future cash flow to equity does better when:

Growth rate of the enterprise earnings is increasing.

Dividends are incredibly diverse from free cash flow or dividends are not available for the private company

Control is even

Growth rate of the company earnings is reasonable.

Dividends are exceptionally dissimilar from Free Cash Flow Equity or Dividends not accessible to Private firms.

Influence is constant and it is not easily changeable

Growth speed of the company's returns is sky rocketing

Free capital flow to the firm does better when.

Growth rate of the company's returns is constant but more than 1%.

Leverage is elevated and predictable to transformation over time is unbalanced

Growth rate in the company wages is elevated

Reasons why a firm may decide to pay less dividends to shareholders

Desire for stability: Dividends are considered sticky i.e. not responsive to change because when there is a variation in dividends is substantially lower cash flows. Also firms do not always increase dividends even when the capital increases.

Future needs of investments: The firm may hold the dividends which it is supposed to pay to stockholders if it has a plan of investing and acquiring more returns. Also, if the company is unsure of its spending plan it may be left with some csh to meet these contingent liabilities.

Tax factors: when stockholders are in high tax bracket and dividends are taxed highly than capital gains the company may decide to pay less as dividend and retain more of cash. When laws are favouring payments of dividends then the company may pay stakeholders more than it is retaining.

Signaling privileges

When there is an increased dividend an indication of good performance of the firm is signaled and if a low dividend is paid it signals poor performance of the company. The use of payment of dividend as signals may direct to distinction amid dividends and free cash flow to equity.

Managerial self interest

If administration retain cash it will be at a better position than when it has disbursed the entire amount or some of it as dividends, this is because they can invest it and earn more profits.

Similarities of valuation methods

Existing experiential evidence advises that residual income assessment models based on historic cost accounting considerably underestimate equity standards. It has also been established that price rises causes no precise function in the valuation of structures that arise from the residual income reformulation of the payment valuation model: provided that internally dependable definitions are used, it matters little whether the accounting system used is based on historic cost accounting conventions or adjusted for inflation ( Herning, et al 2007).

Examining the role of inflation in residual income valuation using both replication and theoretical models reveals that, although the basic assessment structures of residual income models stay unchanged inflation alters the linear energetic such that even in a relatively low inflationary surroundings residual income models are likely to create strict under-valuations

Value to price ratio can foresee abnormal returns in either model of valuation Lee (1999) Lee argues that in three models valuation can be done for simple markets and hence the results lead to a cross-section forecasting in abnormal future date returns.

Differences of valuation methods

Where there are palpable dissimilarities between the properties, you will require building modifications to get to the correct evaluation amount. Possessions are not always homogenous and not many properties are truly the same. This means making contrast is extremely skewed. (Kaplan F, & Rubak 2000b)

This makes valuation an art because the results got are not precise. Different valuers can look at the similar assets and come up with different figures, and in theory at least, they are all right!

In making alterations the enticement might be to knock off a small piece to allow for the price of maintenance and improvements. What the valuer will be prepared to pay is the market value of the asset and he will not be in a position to find out what is missing in the asset and deduct to find the value that he is supposed to pay. This is the reason why property valuer argue that cost of the property is not always equal to its value.

The more distinctive belongings are, the less likely they will be able to find directly applicable verification, and the more modifications will call for. In other words, the more the assets are unique the decisions are required to be used and often there is no surrogate for knowledge

Different valuation methods will come up with different figures depending on place where the property, the class of the people, its future among others. Hence no certainty can be used to get the same values when valuing property at all.

Conclusion

Valuing of assets or liabilities is very vital to any kind of finance management. It is evident that more than one method may be used to come up with good and reliable results. This can be done by valuing the property using the three models and then finding the average of the three models.

Where there are blatant dissimilarities between the properties, you will require building modifications to get to the accurate appraisal amount. Possessions are not always homogenous and not many properties are truly the same.

Otherwise, all the methods of valuing properties have some similarities like they will produce good price if the economy is growing .Hence, a great need to compare the models to get similarities and differences is vital to get better values. Most of the research carried out ranks Free cash flow model to be the best. (Kaplan F, & Rubak 2000b)

Reference:

Lee, JB 1999, Reviewing Williams Theory of Investment Value. McGraw, Tokyo.

Herning, et al 2007 valuation tangible and intangible assets Simpletiom press, Delhi.

Olson E, & Firthglow, G 2005 Modern valuation models: Critical Analysis on merits and demerits. Kenya Literature Bureau, Nairobi.

Kaplan F, & Rubak 2000b Comparison of valuation models. Oxford University Press, Oxford.

估值贴现模型

介绍
估值逼近的过程中,一项金融资产或金融负债的公允价格。据融资,估值可以做到在股票,期权,专利,商标或商业公司或负债,如债券或然负债,担保和租赁等资产。有很大意义估值。它协助分析投资的资本预算,准备兼并和收购各种形式的交易,提供各种财务报告,应课税负担和诉讼的情况下。
可以使用各种方法,如现金流量贴现法确定基于预计未来现金流量的公司的价值进行估值。资本的机会成本进行评估的风险和回报比较。此方法将补偿投资者的情况下存在更多的风险。公司价值的计算寻找相关企业的价格只有同类公司。
业务股利贴现模型估值是指一个系统,值集合应做生意在通过查找当前值的所有前景股息相若。模拟假设股息将在一个稳定的速度发展,这一发展将持续无尽的时间。它还假定的必要回报率是较高比无数的扩张率。剩余收入估值模型有两个组成部分:目前权益账面价值和即将到来的剩余收益的现值。虽然是基于贴现现金流模型的前提后,只有收到现金流量由股东的股息。即使修改后的版本被视为股息的模式,即股票投资回报可能因此造成disvalue坚定少于或多于其利益相关者。
股利贴现模型(DDM)
这是通过使用预测股息和贴现为现值股票的价格估值。应该指出的是,如果股息贴现模型是高于股份被交换的股票被低估了。 ( OHLSON E, & Firthlow的2005年,G )
价值=每股股息(DPS) /折扣率 - 股票股利增长率
这是股票价格=股息/ ( R - G )
这个方程是一个用来寻找资本增值,使R公式的主题。 (一) Ë 。 R = (股息/股价) + G
其中g是假定股息增长率
Div是股息
r是折扣率。
从上面的公式,这是显而易见的,折扣率不能小于生长。
缺点
这个模型是较为保守的:这是因为股股票价值至其现值,其未来股息,而不是其盈利。
股息贴现模型可以应用成功,只有当公司已经是一个显着的工资数额作为股息分配。但最终盈利变成股息。这是因为一旦一家公司达到其成熟,它不会需要再投资在其扩张,所以管理就可以开始向股东派发现金。
经理可遵循一些模糊的收购,以满足他的自我膨胀。这可能是作为结果的保守。
主观的贡献可能会导致到unparticular模型和效果不佳
在评估的核心是一个估计的过度依赖
高架理解分钟输入假设的变化
优点
有接近未来股息计算时的灵活性。
它提供了有价值的估计,即使当输入过度容易
可以倒使目前的股票价值,可以用来收取市场扩张的假设和预测回报
股东都能够满足他们的模型到模型中,他们的预期,而不是力契合假说
相关指定的假设,使灵敏度检查的方式和审议的市场反应不断变化的条件
比较贴现免费cashfows的权益与修改后的股利贴现模型
电源投资回收期(累计超额现金回报,这主要是因为后果不支付现金自由流动作为股息权益)将体现弯出什么样的公司可以退给他们的股东作为股息随着时间的推移计算。
剩余收益估值模型(国家公共卫生与环境研究所)
剩余收益是指普通股股东的机会成本是用于生产纯收入纯收入减支出。有些作者是指它作为估值方法,经济利润和盈利异常。
剩余收益估值模型的优点
终值是一个相对少部分的电流值
它需要唯一可用的数据准备会计交易
公司支付股息或不支付,可以使用这个模式
这种模式是合适的,即使现金流量时,在该公司多变。这是说,
它主要集中在资产的经济价值
A公司不支付报酬,如果奖金不被预期
自由现金流在一个知足的预测地平线,因此是建设性的物业估值,需要用剩余收益估值模型。
有高的不可预测性,估计终值
剩余收益估值模型的缺点
由于它使用已经可用的计费数据被操纵,那么它可能无法提供准确的结果。
当改变,会计数据可能需要一些调整未能达到不可靠的信息。
这种模式需要一个明确的多余关系,认为是说,剩余价值以外拥有贯穿盈利交易的所有操作
这是很难预测的账面价值和投资回报率的企业。
一尘不染过剩会计是巨大的偏离。
自由现金流量折现模型( DFCFM )
顽强的前景现金流集估计的时间与预测期内的现金流量洪流后,标志着持续值得。这可以分为两个自由现金流股权打折款;论证的基础上,只接受现金
股东所收到的流量是股息。多少来衡量给股东的股息现金再投资的需求得到满足后,将支付给利益相关者的数量的形式。应该指出的是营运资金增加,降低了公司的现金流量及营运资金的情况下,减少了现金流折痕股东。第二个是自由现金流贴现到坚定模型。通常是高杠杆的企业和期望去降低他们的价值随着时间的推移。该公司可能决定这样做,因为偿还债务不能被分解,资金成本可能不会随时间的变化。 (奥尔森E, Firthglow的2005年,G )
这可以划分为经济增长模式应仅适用于现金流量正时..两阶段模型,必须使用时,该公司正以温和速度增长( 8%以上的发展速度的不断) ,必须应用三阶段模型,只有当公司的发展在一个较稳定的速度( F卡普兰, & Rubak 2000B )
使用自由现金流量折现模型估值优势
更好地为公司支付巨额股息的权益自由现金流超过。股息可以是巨大的,如果是低于75%的股票或股息自由现金流超过股权资本自由。 (海宁,等人,2007年)
它是适用于自由现金流的公司,是很难估计,例如,在银行及其他金融公司。
这是不容易改变股息价值自由现金流模型
投资者能够接受他的股息,他相信与该公司
每股股息通常是
每股盈利是常见的,这表明,所得到的回报是很高的。
盈利应该象征着现金流的总和,可以补偿作为股息
免费的现金流是比工资少受处理。
缺点
公司通常比他们真的能够发放额外股息,所以压力表往往过于传统
不诚实的管理可以影响报告盈利受益,甚至滥用一些资金。
从来没有给投资者的好处作为现钱运行。
大致详述。由于未来现金流量,以确定目前的使用
股东不接受免费充电现金流。
当每个模型是合适的比较和对比
股利贴现模型确实更好:
当公司的盈利增长速度是恒定的,即(公司在经济增长超过1% ,卡普兰楼& Rubak 2000B )
当奖金是接近自由的现金流权益或未来现金流量权益很难计算。
当杠杆坚定不移
当公司盈利的增长速度是天空刮
未来现金流权益时是否性能更好:
对企业盈利的增长速度在不断增加。
股息,自由现金流或股息是令人难以置信的多样化不适用于私人公司
即使是控制
公司收入的增长率是合理的。
股息是格外不同的自由现金流权益或无法访问私营企业股息。
影响力是恒定的,它是不容易多变
公司的收益增长速度飞涨
公司的资本自由流动时没有更好。
公司的回报增长率是不变的,但超过1 % 。
杠杆是高架和可预见的改造随着时间的推移不平衡
在公司的工资增长率升高
为什么一个公司可能决定少付股息予股东的原因
稳定性:股息的欲望被认为是粘即不响应改变,因为当有变化股息的现金流量大幅降低。还行并不总是增加股息,即使增加资本。
未来投资需求,该公司可能会持有股息,它是应该支付给股东,如果它有一个计划,投资和获得更多的回报。此外,如果该公司不能确定其支出计划,它可能会留下一些长山壕,以满足这些或然负债。
税收因素:当股东是高税收支架和股息征税高度不是资本收益,该公司可能会决定少付的股息及保留更多的现金。当法律是有利于支付股息,那么该公司可能会支付利益相关者超过保留。
信令特权
当有增加股息良好表现坚挺的指示信号,如果低股息支付公司业绩不佳的信号。作为信号指示使用支付股息,股息和权益自由现金流中的区别。
管理自我权益
如果管理保留现金,这将是一个更好的位置时,它已经作为股息支付的全部金额或一些,这是因为他们可以投资,赚取更多的利润。
估值方法的相似之处
现有的经验证据建议,剩余收益评估模型基于历史成本会计大大低估股票的标准。它也被确定,物价上涨导致的估值结构产生的剩余收益重新支付估价模型没有精确的功能:提供了用于内部可靠的定义,很重要的一点是否使用的会计制度是基于历史成本会计惯例或通货膨胀调整的(海宁,等人,2007年) 。
检查剩余收益估值,同时使用复制和理论模型表明,在通胀的作用评估剩余收益模型的结构虽然基本保持不变通货膨胀改变了线性精力充沛,即使是在一个相对较低的通胀环境可能创造剩余收益模型严格根据估值
可以预见,价值价格比在任李估值(1999)李认为,在三个模型的估值,可以做简单的市场,因此结果引来在未来日期异常回报的横截面预测模型的异常报酬。
估值方法的差异
哪里有可触及的异同属性,你会要求建筑修改才能正确评价金额。财物并不总是均匀的,并没有多少真正的属性是一样的。这意味着对比是极其扭曲。 (卡普兰楼2000B Rubak )
 
这使得估值是一门艺术,因为得到的结果是不准确的。不同的估值可以看类似资产,拿出了不同的数字,至少在理论上,他们都是正确的!
 
在作出改变的诱惑可能是,歇工一小片的价格,以便维护和改善。估值师将要准备付出的是资产的市场价值,他不会在一个位置,找出资产中缺少什么,并扣除找到价值,他应该支付。这是什么原因,为什么物业估值师认为,物业成本并不总是等于它的价值。
更鲜明的财物,不太可能,他们将能够找到直接适用的验证,将呼吁更多的修改。换句话说,资产是唯一的决定需要被使用,而通常情况下没有对知识的代孕
不同的估值方法,将拿出不同的数字,这取决于在地方物业,类的人,其未来等等。因此,没有把握可以用于物业估值时得到相同的值。
结论
的资产或负债的重视是非常重要的,任何形式的财务管理。这是显而易见的,可以使用一种以上的方法来与良好和可靠的结果。这可以通过使用三个模型评估属性,然后找到三个模型的平均。
哪里有公然属性的异同,你会需要修改建筑物得到准确的评价金额。财物并不总是均匀的,并没有多少真正的属性是一样的。
否则,所有物业估值的方法有一些相似之处,例如他们会产生良好的价格,如果经济增长,因此,非常需要比较模型的相似性和差异性是至关重要的,以获得更好的值。大多数进行的研究行列自由现金流模型是最好的。 (卡普兰楼2000B Rubak )
参考:
李,巴顿回顾1999年,威廉姆斯的投资价值理论。麦格劳,东京。
海宁,等2007年估值有形和无形的资产,德里Simpletiom记者。
奥尔森E , & Firthglow的2005年,G现代估值模型:批判分析的优点和缺点。文艺局,肯尼亚内罗毕举行。
卡普兰楼Rubak的2000B比较估值模型。牛津大学出版社,牛津大学。