Explain method to analyze and to value seasonal businesses
Are there any methods to analyze and to value seasonal businesses?
Expert
Seasonal businesses can be valued through discounting flows using yearly data, but this needs some adjustments. The right way to value the flows is using the monthly data. Fernández (as 2003 and 2004) demonstrates that errors because of the utilization of annual data are significant. When using annual data, the computations of the value of the unlevered company and of the value of tax shields should be adjusted. Conversely, the debt we have to subtract in order to compute the value of the shares does not require any adjustment.
By using the average debt and the average of the working capital needs does not give a good approximation of the value of the company. Here not much emphasis on the impact of seasonality in company valuation as: Damodaran (1994), Myers and Brealey (2000), Penman (2001) and Copeland (2000) do not even comprise the terms “seasonal” or “seasonality” in their indexes.
Our company (A) is going to buy the other company (B). We need to value the shares of B and, thus, we will use three options of the structure Debt/Shareholders’ Equity in order to obtain the WACC as: 1) Present structure of A
XY Company has made a portfolio of such three securities: The correlation coeffic
Is the market risk premium a parameter, for the world economy or for the national economy?
Provide a brief overview of Capital Market Efficiency?
what are the objectives of international finance
Which method must we use to valuate young companies along with high growth but uncertain futures? Two illustrations were Boston Chicken and Telepizza while they began.
What are the different types of mathematics found in quantitative finance?
One of the projects the US loan would fund is to build earthquake-resistant buildings. The projectwill begin in March 2013, last for two years and is expected to have the following expenditures:start-up costs of $200,000 paid at the beginning of the first month; renta
If the model could not even find bond prices right, how could this hope to accurately value bond options?
The often known as "cash flow" that is net income plus depreciation, is a flow of cash, but is this a flow to the company or to the shareholders?
18,76,764
1942672 Asked
3,689
Active Tutors
1426475
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!