The purpose of this thesis is to look at how the two widely used valuation approaches Free Cash Flow to Firm and Relative valuation can contribute to the explanation of market prices of shares. The study also aims to investigate if it is possible to find any significant differences between industries, while using the two valuation methods. There are a large number of models that are used to value assets and corporations, which have been used for a long time in the banking sector and similar contexts. It is widely known that a single valuation method or model which could predict a future stock price is hard to find or might even not exist. The study uses a quantitative method, in which we evaluated 36 Swedish companies, to be able to draw conclusions about the two valuation approaches. Our results suggest that the calculated prices obtained from the two methods correlate with the market price of the share, and that the result differ between different industries.

Background: In an inefficient market, the intrinsic value of an asset may not be equal to its true market value. Therefore, before engaging in a stock transaction, both the seller and the buyer would want to know the intrinsic value of the stock as neither would want to lose money during the process. An effective valuation model enabling investors to efficiently determine firm values is therefore considered to be a crucial factor. Purpose: The purpose of this thesis is to analyze the free cash flow to equity (FCFE) approach and the dividend discount model (DDM) on 30 Swedish companies. This to conclude if they are considered to be accurate valuation models and to determine if one of the methods gives a more accurate estimation of the companies’ share prices than the other. Additionally, the report will examine if one model is preferred for a specific sector and if a payout ratio exists where the DDM generates a particularly realistic valuation. Method: A database will be produced to estimate share prices for each company using both the FCFE approach and the DDM over five consecutive years. The accuracy of the models will be evaluated by dividing the projected share prices with their corresponding actual stock prices to calculate the percentage deviations. The smaller the percentage deviation, the more accurate is the estimated share price considered to be. Conclusion: It is evident from the findings of this thesis that the FCFE approach and the DDM produce accurate valuations for Swedish companies. It is difficult to determine that one is preferred over the other altogether, instead the FCFE approach is preferred in some cases and the DDM in others. This depends on the companies’ actual stock prices, which industry the companies operate in and the amount the companies are assumed to pay out as dividends.

As informações evidenciadas pelas empresas que exploram e produzem óleo e gás são objetos de consideráveis controvérsias. O centro dessa controvérsia está nas deficiências do modelo do custo histórico em fornecer informações adequadas para os usuários das demonstrações contábeis. O mais importante evento para as empresas que exploram e produzem petróleo é a descoberta de reservas de óleo e gás, e não os lucros e as receitas derivadas das vendas do óleo e do gás. O modelo do custo histórico, entretanto, não consegue mensurar e evidenciar adequadamente as reservas provadas de óleo e gás até que essas reservas sejam desenvolvidas, produzidas e vendidas. Outro problema relacionado ao modelo do custo histórico para as empresas do setor petrolífero, é de que os custos incorridos para se descobrir reservas de óleo e gás possui pouca, se é que há alguma, relação com o valor das reservas provadas. Como resultado dessas deficiências do modelo do custo histórico, e como uma tentativa de \"adaptar\" os resultados, duas formas de capitalizar os custos da atividade de exploração e produção de óleo e gás são utilizadas e aceitas, o método da Capitalização Total e o método da Capitalização pelos Esforços Bem Sucedidos. A avaliação das reservas provadas de óleo e gás das empresas, assim como as decisões de investimentos, são afetadas pela incerteza econômica, pela incerteza técnica, assim como pelas flexibilidades gerenciais embutidas na exploração e produção de óleo e gás. A técnica do Valor Presente Líquido não possui atributos para capturar essas flexibilidades, pois não considera a opção de, por exemplo, adiar o desenvolvimento de uma reserva para o momento em que o preço do barril de petróleo se mostrar conveniente para os planos da empresa. Este estudo tem por objetivo explorar e aplicar as diferentes formas de avaliação de reservas petrolíferas: a) contábil; b) fluxo de caixa futuro (Hotelling); c) fluxo de caixa descontado padronizado; d) margem direta; e) fluxo de caixa descontado; e f) opções reais, a fim de descobrir qual delas apresenta-se como a melhor forma para capturar o valor justo do principal ativo das empresas que exploram e produzem petróleo - as reservas provadas de óleo e gás. Na comparação das técnicas de avaliação, a avaliação pela teoria de precificação de opções se mostrou como a melhor forma de se avaliar as reservas provadas das empresas analisadas, seguida pelas avaliações do fluxo de caixa descontado e pelo princípio de avaliação Hotelling. / The information disclosed by oil and gas companies is a source of great controversy. The main issue is the deficiency of the historical cost model to supply adequate information for financial statement users. The most important event for oil exploration and production companies is the discovery of oil and gas reserves, and not the profits and revenues deriving from oil and gas sales. However, the historical cost model does not manage to adequately measure and disclose the oil and gas reserves until they are actually developed, produced and sold. Another problem in the historical cost model for petroleum companies is that there is hardly any or no relation between the costs incurred to discover oil and gas reserves and the value of the proved reserves. As a result of these deficiencies in the historical cost model, and in an attempt to \"adapt\" the results, two ways of capitalizing the costs of oil and gas exploration and production activities are used and accepted, the Full Cost method and the Successful Efforts method. The evaluation of the companies\' proved oil and gas reserves as well as the investment decisions are affected by economic uncertainty, technical uncertainty and by the management flexibilities inserted in oil and gas exploration and production. The Net Present Value technique does not have the attributes to capture these flexibilities, since it does not consider the possibility of delaying the development of a reserve to a moment at which oil prices are convenient for company plans for example. This study aims to explore and apply different forms of evaluating oil reserves: a) accounting; b) future cash flow (Hotelling); c) standardized measure of discounted cash flow; d) direct margin; e) discounted cash flow; and f) real options, with a view to discovering which of these comes out as the best way to obtain the fair value of oil exploration and production companies\' main asset - their proved oil and gas reserves. In the comparison among different techniques, evaluation according to option pricing theory revealed to be the best way to evaluate the proved reserves of the analyzed companies, followed by the discounted cash flow evaluation and by Hotelling\'s evaluation model.

The aim of the diploma thesis is to estimate the market value of the Czech wine production company Znovín Znojmo, a.s. as at 1. 1. 2011. The thesis comprises financial analysis, strategic analysis, value generators analysis and forecast, financial plan and the final valuation based on discounted cash flow method (DCF), supported by market approach method (industry multiples method). The final part of the thesis includes a discussion about the results of the used methods.

As informações evidenciadas pelas empresas que exploram e produzem óleo e gás são objetos de consideráveis controvérsias. O centro dessa controvérsia está nas deficiências do modelo do custo histórico em fornecer informações adequadas para os usuários das demonstrações contábeis. O mais importante evento para as empresas que exploram e produzem petróleo é a descoberta de reservas de óleo e gás, e não os lucros e as receitas derivadas das vendas do óleo e do gás. O modelo do custo histórico, entretanto, não consegue mensurar e evidenciar adequadamente as reservas provadas de óleo e gás até que essas reservas sejam desenvolvidas, produzidas e vendidas. Outro problema relacionado ao modelo do custo histórico para as empresas do setor petrolífero, é de que os custos incorridos para se descobrir reservas de óleo e gás possui pouca, se é que há alguma, relação com o valor das reservas provadas. Como resultado dessas deficiências do modelo do custo histórico, e como uma tentativa de \"adaptar\" os resultados, duas formas de capitalizar os custos da atividade de exploração e produção de óleo e gás são utilizadas e aceitas, o método da Capitalização Total e o método da Capitalização pelos Esforços Bem Sucedidos. A avaliação das reservas provadas de óleo e gás das empresas, assim como as decisões de investimentos, são afetadas pela incerteza econômica, pela incerteza técnica, assim como pelas flexibilidades gerenciais embutidas na exploração e produção de óleo e gás. A técnica do Valor Presente Líquido não possui atributos para capturar essas flexibilidades, pois não considera a opção de, por exemplo, adiar o desenvolvimento de uma reserva para o momento em que o preço do barril de petróleo se mostrar conveniente para os planos da empresa. Este estudo tem por objetivo explorar e aplicar as diferentes formas de avaliação de reservas petrolíferas: a) contábil; b) fluxo de caixa futuro (Hotelling); c) fluxo de caixa descontado padronizado; d) margem direta; e) fluxo de caixa descontado; e f) opções reais, a fim de descobrir qual delas apresenta-se como a melhor forma para capturar o valor justo do principal ativo das empresas que exploram e produzem petróleo - as reservas provadas de óleo e gás. Na comparação das técnicas de avaliação, a avaliação pela teoria de precificação de opções se mostrou como a melhor forma de se avaliar as reservas provadas das empresas analisadas, seguida pelas avaliações do fluxo de caixa descontado e pelo princípio de avaliação Hotelling. / The information disclosed by oil and gas companies is a source of great controversy. The main issue is the deficiency of the historical cost model to supply adequate information for financial statement users. The most important event for oil exploration and production companies is the discovery of oil and gas reserves, and not the profits and revenues deriving from oil and gas sales. However, the historical cost model does not manage to adequately measure and disclose the oil and gas reserves until they are actually developed, produced and sold. Another problem in the historical cost model for petroleum companies is that there is hardly any or no relation between the costs incurred to discover oil and gas reserves and the value of the proved reserves. As a result of these deficiencies in the historical cost model, and in an attempt to \"adapt\" the results, two ways of capitalizing the costs of oil and gas exploration and production activities are used and accepted, the Full Cost method and the Successful Efforts method. The evaluation of the companies\' proved oil and gas reserves as well as the investment decisions are affected by economic uncertainty, technical uncertainty and by the management flexibilities inserted in oil and gas exploration and production. The Net Present Value technique does not have the attributes to capture these flexibilities, since it does not consider the possibility of delaying the development of a reserve to a moment at which oil prices are convenient for company plans for example. This study aims to explore and apply different forms of evaluating oil reserves: a) accounting; b) future cash flow (Hotelling); c) standardized measure of discounted cash flow; d) direct margin; e) discounted cash flow; and f) real options, with a view to discovering which of these comes out as the best way to obtain the fair value of oil exploration and production companies\' main asset - their proved oil and gas reserves. In the comparison among different techniques, evaluation according to option pricing theory revealed to be the best way to evaluate the proved reserves of the analyzed companies, followed by the discounted cash flow evaluation and by Hotelling\'s evaluation model.

Este documento tiene como primer objetivo mostrar los diferentes métodos de valoración de empresas estudiados en las últimas décadas. No obstante, el trabajo profundiza en la valoración de pequeñas empresas como tema central, debido a que hasta la actualidad no se las ha investigado con el mismo interés que a empresas corporativas, lo que pone en evidencia una falta de consenso. Así, el segundo objetivo es ofrecer al lector una fuente de información, a manera de compendio inicial, que motive a investigar el tema, realizar estudios específicos, servir de materia de tesis académicas, entre otras contribuciones. El primer capítulo de este trabajo aborda el tema partiendo de la definición del concepto de valor, y sustenta la diferencia entre valor y precio. Asimismo, en él se realiza una reseña de la evolución del estudio de valoración de empresas, se explica qué es una pequeña empresa en el marco nacional e internacional, y, finalmente, se aborda la valoración de pequeñas empresas en específico. Por su parte, el segundo capítulo describe los métodos de valoración de empresas más utilizados y aceptados, y presenta sus ecuaciones y guía detallada de uso. El tercer capítulo expone errores encontrados en valoración de empresas; el cuarto capítulo describe seis metodologías de valoración de pequeñas empresas, y presenta sus respectivas ecuaciones y los pasos a seguir para su uso. Finalmente, el quinto capítulo se enfoca en un tema de similar importancia, la estimación del costo de capital en pequeñas empresas, el cual genera, inclusive, mayor controversia. / The first objective of this document is to show the different Company valuation methods studied in the last decades. However, the work looks into the valuation of small business, as a central topic, because until now they have not been investigated with the same interest than the Corporative Companies, which evidences a lack of consensus. Thus, the second objective is to offer a source of information to the reader, as an initial summary, that motivates to investigate the topic, do specific studies, serve as a topic for Academic Thesis, among other contributions. The first chapter of this paper approaches the topic starting from the definition of the concept of the value and supports the difference between value and price. Moreover, there is an outline of the evolution of the study of valuation of Companies, it is explained what is a small business in the national and international framework and, finally, the valuation of specific small business is approached. On its part, the second chapter describes the most used and accepted companies’ valuation methods and presents its equations and detailed user guide. The third chapter shows mistakes found in companies’ valuation; the fourth chapter describes six methodologies of the valuation of small business and shows its respective equations and the steps to follow for its use. Finally, the last chapter focuses on a topic of similar importance, the estimation of the capital cost in small companies that generates, even, more controversy. / Trabajo de Suficiencia Profesional

Nuclear power plants across the United States are reaching the end of their current operating licenses, forcing decision makers to think about the way forward. As they consider the best alternatives for dealing with aging nuclear plants, it is becoming increasingly important to have an accurate method for calculating the long-term costs of nuclear power plants. This report begins by investigating the methodologies currently used in these calculations. They focus on the uncertainty associated with deregulated electricity markets and can be broken down into two main categories: discounted cash flow and real options analysis. Next the report discusses the limitations of the current methodologies, focusing specifically on those aspects of evaluation that are currently eclipsed by electricity market uncertainty. Finally the report offers recommendations for addressing these limitations and creating a stronger analytical framework for calculating the lifetime cost of nuclear power plants. / text

Darbe analizuojama AB „Pieno žvaigždės“ įmonės vertė. Nagrinėjama problema – ar įmonės akcijų rinkos kaina atitinka tikrąją įmonės vertę. Darbe atlikta pagrindinių vertės nustatymo metodų palyginamoji analizė. AB „Pieno žvaigždės“ vertes nustatymui pasirinkti du metodai: diskontuotų pinigų srautų, tenkančių įmonei ir palyginamųjų rodiklių. Diskontuotų pinigų srautų metodu nustatyta akcijos kaina - 3,50 lito. Akcijos rinkos kaina – 2,10 lito (2009 m. gegužės mėn). Tai parodo, kad įmonės akcijos yra nepakankamai įvertinamos rinkoje. Palyginamieji rodikliai lyginti su panašiomis dydžiu pieno perdirbimo įmonėmis užsienyje. Palyginamųjų rodiklių metodu apskaičiuota apytikslė akcijos vertė – 3,51 lito. Palyginamųjų rodiklių analizė patvirtina, kad įmonės akcijos yra nepakankamai įvertinamos. Atsižvelgiant į tyrimo rezultatus, rekomenduojama pirkti AB „Pieno žvaigždės“ akcijas. / This paper studies the value of JSC company „Pieno žvaigždės“. The main question addressed is: does company’s market share price is equal to the true value of the share. This paper analyses main valuation methods. For valuation of JSC “Pieno žvaigždės” share discounted cash flow to the firm and relative valuation approaches are chosen. Price calculated by the method of discounted cash flow to the firm - 3,50 litas. Market value of the share – 2,10 litas (as of May 2009). The findings show that shares of the company are undervalued in the market. Relative valuation ratios are compared to dairy companies abroad which are similar by size. Price calculated by relative valuation method – 3,51 litas. Relative valuation method proves that shares of the company are undervalued in the market. According to the findings of the paper it is recommended to acquire shares of JSC “Pieno žvaigždės”.

If a programme which intends to measure performance is to work successfully in an organisation, it is necessary to understand the contingent factors that need to be in place regardless of philosophical beliefs. It must be integrated with the overall strategy of the business; all approaches to performance measurement emphasise the alignment of objectives, measures, strategic decision making and rewards. This is crucial, as it is not possible to measure performance unless it is clear what an organisation is trying to achieve. Value-based management (VBM) is a powerful management framework with the aim to focus all managerial processes on shareholder wealth creation. It therefore encourages all staff levels within the organisation to focus on value creation. Various metrics have been developed to measure the value creation process within the organisation. The application of VBM principles at the lower levels within the organisation is critical to ensure that lower level staff applies value-creating principles in their daily jobs. Anglo Platinum has also adopted VBM, which will help the organisation to enhance decision-making and ensure pursuing strategies that maximise value. Anglo VBM is a management system which will enable the company to significantly improve the quality and speed of decision-making and to drive performance and profitable growth. It requires a detailed understanding of where and why value is created or consumed within the businesses through assembling a comprehensive fact base. A quantitative study was done to collect primary data through the use of standardised questionnaires that were distributed to respondents at Bleskop and Brakspruit shafts as well all the accountants at Rustenburg Platinum Mine, which forms part of Anglo Platinum. The results from this study indicate that there is a low understanding of VBM as well as a strong focus on business unit objectives and on short-term goals. A key recommendation would be to use incentive mechanisms to be aligned to VBM. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2009.

One of the important operational and in some cases, also strategic business decisions, is in respect of the investment of funds. Although there are a number of assets to invest in, two particular popular investment asset classes are land and/or property. Land however, is becoming a very scarce resource. It can be argued that many companies investing in the property sectors' main income is generated from the sale of land. A new way of gaining a sustainable income stream is followed. This is done by investing in different kinds of property development projects. One of the problems that companies face is to determine whether a property development project is a good investment, meaning that it will generate sustainable and acceptable profits in the long term. Companies evaluate prospective investment opportunities by assessing whether the expected return, adjusted for project risk, exceeds the company?s required return. Different impact parameters exist and were identified in the study. Valuation methods used in determining the overall feasibility were discussed and evaluated to see the impact on the property development project. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2011.