Develop a company valuation model using the discounted cashflow valuation

Instructions for the Project

Students are required to develop a company valuation model using the discounted cashflow valuation and other methods for a company publicly listed on the New Zealand’s Exchange (NZX). The company of your project will be assigned by the lecturer. Please see the Canvas for your assigned company. The model should contain:

• Financial statements that are forecasted 5 years into the future based on the 5 years’ worth of past information provided. (Balance Sheet, Income Statement, Cashflow Statement)
  • Assumptions made in forecasting the future should be identified and justified with reference to past financial information, other annual report information and any other information sources that the student deems important.
  • All assumptions made by the student should be reasonable and justified.
  • The model should also contain opportunities for the user to change key inputs to assess the impact on the firm’s value.
  • Students should feel free to add in additional information from the annual reports where it will add value to their model i.e. segmented revenue information or more detailed expense data, or consolidate items where forecasting makes no sense.
• The model should accurately compute the weighted average cost of capital and beta, at a minimum based on five years of monthly data. Better solutions will offer the user the option of altering the period and frequency of the beta used in the calculation of the WACC (i.e. one year daily data)
• Accurately employ the Free Cashflows formula to compute the cashflows for the next 5 years based on the forecasted financial statements’ information, and then use the Discounted Cashflow and/or other relative methodologies to compute the value of the company and hence stock price.
• Model should contain a summary page that brings together key inputs and key outputs.
• The valuation model should conform to the rules of good financial model design.