I’m working on a business case study and need an explanation and answer to help me learn.
Valuing Ford (F) based on their 10ks (attachment below).Follow the first half of chapter 10 (i.e. beginning of chapter 10-exhibit 10.12 should be enough info to follow) to build a basic valuation for either of the above companies. Use a WACC of 8%. (I will provide pictures of chapter 10 when you accepted, about 12 pages, I don’t have pdf of it)
Steps you’ll need to do:
Basic enterprise DCF analysis
Forecast growth from most recent year end for 3 years…assume 10% g for REED for the 3 years and 2.5% after. Assume 4.5% growth for F for 3 years and 2.5% after (or choose your own and defend it).
Reorganize the financial statements to find NOPAT and Invested Capital.
List any other assumptions you make in your analysis.Report: Should just be a page either in word or excel showing the cash flows, continuing value, enterprise value, less debt items, to find the value of common stock, or equity (per share basis is optional). Similar to tables 10.4 10.7 10.8 for example. We will discuss what you all come up with as a class and who is more/less right and/or why you defend your assumptions and process.
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