Compute the equity value, which represents the enterprise value and interpret it. Make a chart explaining how you obtained the value. Also, estimate the value per share taking into account t
finance case study and need the explanation and answer to help me learn.
I need help valuing a Apple Inc. There is a pdf attached with the instructions and an excel with useful information to value the firm. However, you can also use other resources to gather the information needed.
Things such as the WACC, Equity Value, Prime control and so on need to be computed. Please see the attached pdf for detailed instructions.
Please make sure you make the charts needed and mention some articles / analysts opinion whenever it is asked.
Requirements:
Using the spreadsheet attached compute the following about Apple Inc. If you cant find all the information you need on the spreadsheet you can also use the internet or other resources to gather it. 1. Compute the WACC, using the formula WACC = (E/V)* Ke + (D/V) * Kd * (1-t) and interpret it. Explain why you decided to use the tax rate you choose. Below there is an example of how your answer should look like. (That data is an example) 2. Compute the residual value of the latest year and show your work. Interpret the result obtained and state whether the growth rate is high, medium or low and why. Also include some analysts opinion or finance articles on this matter and compare it to your results. Below there is an example of how your answer should look like. (That data is an example) 3. Compute the enterprise value of the firm. Create a chart including the FCF, WACC, discount rate and discounted FCF to obtain the enterprise value. Interpret the result. Below there is an example of how your answer should look like. (That data is an example)
4. Compute the equity value, which represents the enterprise value and interpret it. Make a chart explaining how you obtained the value. Also, estimate the value per share taking into account the number of apple shares there are in the market and compare it to the latest value of a share in the market. Below there is an example of how your answer should look like. (That data is an example) 5. Compute the sensitivity analysis if you think it is relevant and why it is important to copmute it for this firm in case it is important, explain if there are expectations of Apple inc reducing its future sales, and briefly talk about how its sector is expected to be in the future. Remember that if the future sales are not expected to decrease a sensitivity analysis isnt needed and you would only need to compute the sensitivity analysis on the enterprise value and the sensitivity analysis on the Equity value. Below are some examples of other firm sensitivity analysis, your answer should look like that. 6. Value the firm using multiples. Compare it with its main competitors and interpret the result and interpret the results. Below there is an example of how your answer should look like. (That data is an example)
7. Compute the control premium using different reports / information from analysts. Always cite your references and use at least 3 graphs. Below there is an example of how your answer should look like. (That data is an example)
8. Write a conclusion on why it has been important valuing Apple Inc, talk about how long Apple Inc has been listed on the stock market, its shares and so on and refer to all the information you obtained in questions 1 to 7. Your answer should ideally have 1.5-2 pages long. 9. Write a conclusion with recommendations for shareholders and future investors. Should they invest on this firm? Use your data obtained in questions 1 to 7 and also feel free to use different reports / information from analysts. Your answer should ideally have 0.5-1 pages long.
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