Singapur University Singtel Corporation Valuation and Recommendation Analysis
I’m studying for my Business class and need an explanation.
Analyse the valuation of the company and summarise results in a table. Support your findings with workings (to be attached in the Appendix), stating clearly all assumptions used in the valuation model adopted. Assign an appropriate rating to your analysis with the in-house rating categories and definitions below. Recommendations are based on an Absolute Total Return Rating system, defined as follows:
BUYShare price may exceed 10% over the next 12 months
HOLDShare price may fall within the range of +/–10% over the next 12 months
SELLShare price may fall by more than 10% over the next 12 months(25 marks)
If you are using two-stage model, during stage 1 you can manually tweak thevariables. However, during stage two, when you have to estimate terminal value or if you are only using one-stage model, you need to assume that the growth rate of the company (revenue, income) can grow forever. And dividends/FCFF/FCFE bear a consistent relationship to this company growth i.e. dividend payout constant, capex, depre, working capital requirements
constant.
You calculate the stock’s intrinsic or fair value and expect the market to adjust to this value. Therefore, this adjustment may mean stock price appreciation or decline. To calculate the stock’s intrinsic value, you use DDM, FCFF, FCFE, Residual Income, Relative valuation
Please include any reference using APA style.