Finance valuation of En+ group
For discounted cash flow approach
• What model you would like to use stable growth, two periods or three period growths??? To decide you need to check if company is mature or growing.
• In case you see that the company’s current growth above 2%-3% you have to use either two or 3 stage growth model.
• Project cash flow for the period of unstable growth .
• Estimate the terminal value at the end of the period of unstable growth .
• Think of the discount rate you would like to use to compute PV of cash flow. Different rate for different stage of growth? Or the same???
• Remember discount rate will depends on the capital structure of the firm, You may Ned to adjust cash flow as well to reflect this changes
• Do not forget to make assumptions about growth rate of capex, depreciation in different periods of growth . They should align with your projections of sales.
• What you would like to value 1) entire firm or only equity part.
