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Van, Eeden Anita. "Determining the minimum free cash flow required for capital intensive organisations." Thesis, Stellenbosch : Stellenbosch University, 2009. http://hdl.handle.net/10019.1/18128.
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Thesis (MBA)--Stellenbosch University, 2009.ENGLISH ABSTRACT: In financial accounting and economics it is important to be in a position to determine replacement costs of assets. These costs are essential for application of inflation accounting , the calculation of Tobin's q ratio, as well as the calculation of the free cash flow (FCF) of a company. However, it proves to be a daunting challenge to calculate especially accurate replacement costs of a company's fixed assets, owing to the considerable effects that inflation, economic lifetime of fixed assets and procurement strategies have on the replacement cost, and consequently on the FCF of a firm . In determining the FCF of a company, it is essential to differentiate between the goals of a company to maintain fixed assets or to expand operations. This split is difficult to ascertain, as few companies in South Africa publish the split. In addition to this, it is important to distinguish between actual required replacement investment (RI) and that part of the RI that has conveniently been postponed. As a consequence, analysis of a company's financial statements to determine replacement costs and subsequent FCF is further complicated. In 2001 , Hall investigated the behaviour of the average age of fixed assets as calculated with the Cutler and Westwick (1973: 17) formula , by developing specific inflation adjustment models. Hall's (2001: 40) study provided insight into some of the factors that might influence the application of the Cutler and Westwick formula for the calculation of the average age of a firm 's fixed assets. This research report developed Hall's models further, and proved that the average age of fixed assets, as used in the determination of replacement cost of a company's fixed assets, could only be applied in zero inflation conditions. In positive inflation periods, the average age of fixed assets as per Cutler and Westwick's formula is understated, resulting in lower estimations of replacement costs. Consequently, the additional depreciation as determined for inflation accounting purposes is understated. In this research report, the models referred to above were developed further to determine the required maintenance (or RI) part of the investing decision relative to depreciation written off. This enabled the modelling of FCF for companies, assuming certain model restrictions, such as constant inflation, evenroll fixed asset replacement and similar economic lifetimes for all fixed assets. However, this only provides some insight into the trends of additional deprecation required for different situations, and cannot be used in practice as comparable practical situations do not exist. This study therefore concludes that the calculation of replacement cost for inflation accounting purposes proves to be a very complex problem. No simple or quick model currently exists for determining the replacement costs of fixed assets and subsequent FCF of a firm. It is recommended that, when determining the replacement costs of fixed assets, the detailed fixed asset register of the firm should be consulted in order to determine the unique asset investment and replacement strategies, as well as the split of the fixed assets in terms of different economic lifetimes. Once this information is available, unique models per company could be developed based on the applicable inflation rates.
AFRIKAANSE OPSOMMING: In finansiële rekeningkunde en ekonomie is dit belangrik om die vervangingswaarde van bates te kan bereken. Hierdie waardes is essensieël vir die toepassing van inflasieboekhouding, die berekening van Tobin se q-verhouding, sowel as die berekening van die vrye kontantvloei (VKV) van 'n maatskappy. Dit blyk egter 'n moeilike taak te wees om veral akkurate vervangingswaardes vir 'n maatskappy se vaste bates te bereken, as gevolg van die groet invloed wat inflasie, die ekonomiese leeftyd van die vaste bates en aankoopstrategieë het op die vervangingswaarde, en gevolglik op die VKV van 'n maatskappy. In die bepaling van die VKV van 'n maatskappy, is dit noodsaaklik om te onderskei tussen die doelwitte van die maatskappy om vaste bates te onderhou of om werksaamhede uit te brei. Hierdie onderskeid is moeilik om te bepaal, aangesien min maatskappye in Suid-Afrika dit publiseer. Ook is dit belangrik om te onderskei tussen werklik benodigde vervangingsinvestering (VVI) en daardie gedeelte van die VVI wat gerieflikheidshalwe uitgestel is. Die ontleding van 'n maatskappy se finansiële state ten einde vervangingswaarde en die daaropvolgende VKV te bereken, word gevolglik verder gekompliseer. In 2001 het Hall die gedrag van die gemiddelde ouderdom van vaste bates ondersoek met behulp van die Cutler en Westwick (1973: 17) formule, deur spesifieke inflasie aangepaste modelle te ontwikkel. Hall (2001 : 40) se studie het insig gebied in sommige van die faktore wat die toepassing van die Cutler en Westwick formule vir die berekening van die gemiddelde ouderdom van 'n maatskappy se vaste bates kan beïnvloed. Hierdie navorsingsverslag ontwikkel Hall se modelle verder en bewys dat die gemiddelde ouderdom van vaste bates, soos gebruik in die beraming van die vervangingswaarde van 'n maatskappy se vaste bates, net toegepas kan word in toestande van nul inflasie. In periodes van positiewe inflasie word die gemiddelde ouderdom, soos bepaal deur die Cutler en Westwick formule, te laag opgegee, met 'n gevolglike laer skatting van vervangingswaarde. Dit lei daartoe dat die addisionele waardevermindering, soos bepaal vir inflasieboekhoudingsdoeleindes, te laag opgegee word. In hierdie navorsingsverslag word die modelle waarna hierbo verwys is verder ontwikkel ten einde die vereiste instandhoudings- (of VVI-) gedeelte van die investeringsbesluit relatief tot waardevermindering te bepaal. Dit maak dit moontlik om die VKV van maatskappye te modelleer, met sekere modelbeperkings wat veronderstel word, soos konstante inflasie, vaste batevervanging volgens 'n harmonies opgeboude masjienpark, en soortgelyke ekonomiese leeftye vir aile vaste bates. Dit bied egter net 'n mate van insig in die patrone van addisionele waardevermindering wat vir verskillende situasies benodig word en kan nie in die praktyk aangewend word nie, aangesien vergelykbare praktiese situasies nie bestaan nie. Hierdie studie kom dus tot die gevolgtrekking dat die berekening van vervangingskostes vir die toepassing van inflasieboekhouding 'n baie komplekse probleem is. Geen maklike of vinnige model bestaan tans vir die bepaling van die vervangingswaarde van vaste bates en die gevolglike VKV van 'n maatskappy nie. Daar word aanbeveel dat, wanneer die vervangingswaarde van vaste bates bereken word, die gedetailleerde vaste bateregister van die maatskappy geraadpleeg moet word ten einde die unieke investering- en vervangingstrategieë, sowel as die skeiding van die vaste bates op grand van verskillende ekonomiese leeftye, te kan bepaal. Sodra hierdie inligting beskikbaar is, kan unieke modelle vir die maatskappy ontwikkel word op grand van die toepaslike inflasiesyfers.
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Lin, Suzanne Ching-Fang. "Agency costs of free cash flow and the market for corporate control." University of Western Australia. School of Economics and Commerce, 2006. http://theses.library.uwa.edu.au/adt-WU2006.0042.
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[Truncated thesis] This thesis investigates the relevance of Jensen’s (1986) free cash flow theory to the market for corporate control in Australia. Jensen posits that firms generating cash in excess of that required to fund positive NPV projects face greater agency problems as the free cash flow exacerbates the conflict of interest between shareholders and managers. One implication from Jensen’s free cash flow theory is that firms with high levels of free cash flow are more likely to initiate takeovers that are value-decreasing. There are two practical issues in testing Jensen’s theory; first, constructing an appropriate proxy for free cash flow and secondly, identifying firms with free cash flow. These issues are addressed directly in the first of the two essays that comprise this thesis. The first essay develops and assesses the merits of four operational measures for free cash. One of them is a stock measure while the others are flow measures. The stock measure is included because previous studies have mostly used the stock measure of cash when identifying firms rich in free cash (henceforth, cash rich firms), despite that Jensen (1986) has made explicit reference to free cash flow. We test the validity of this approach by investigating whether stock measures of free cash coincide with flow measures. Our results reveal that the stock and flow measures of free cash give rise to quite different lists of cash rich firms. This is an important empirical contribution of the thesis. Given the lack of definitive criteria for deciding which operational measure of free cash flow is most appropriate, we identify multiple sets of free cash flow firms based on the different operational measures developed. For each operational definition, two methods are used to identify cash rich firms. The first method defines a firm as cash rich if its cash variable ranks in the tenth percentile. The second method defines firms as cash rich if their cash variable value is greater than one and a half standard deviations of the value predicted by a model.
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Van, Eeden Johannes Gerhardus. "An in-depth literary study of Tobin's Q ratio, free cash flow and the relationship that exists between Q and free cash flow." Thesis, Stellenbosch : University of Stellenbosch, 2009. http://hdl.handle.net/10019.1/5047.
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Thesis (MBA (Business Management))--University of Stellenbosch, 2009.ENGLISH ABSTRACT: Tobin's q value is widely used by financial analysts as a performance indicator ratio. The market value of a firm over the replacement cost of fixed assets and inventory serves as an indication of whether value is created by investing internally in the firm, or whether value is destroyed by investing in negative net present value projects. Where Tobin's q is greater than one (q > 1), the market value of the firm is greater than what it would cost to replace fixed assets and inventory. Therefore value is created. Firms that have a Tobin's q value of less than one are advised to pay dividends rather than invest in negative net present value projects. Over 200 different methods exist of calculating Tobin's q. By increasing the complexity of the algorithm to determine q, very little is achieved to improve the measurement quality. A strong link exists between excess market returns, free cash flow spending announcements and Tobin's q value for the firm. Firms with a high Tobin's q value should ensure that good investment possibilities are pursued. The use of internal funds to fund new investment is viewed in a positive light by the market and above average returns are generated. Firms with a high Tobin's q value and high free cash flow show lower returns. These lower returns happen as a result of the market recognising the firm's failure to capitalise on favourable internal investment opportunities.
AFRIKAANSE OPSOMMING: Tobin se q-waarde word wyd gebruik as prestasie aanwyser deur finansiele ontleders. Die markwaarde van 'n firma gedeel deur die vervangingskoste van vaste bates en voorraad, dien as 'n maatstaf om aan te dui of waarde geskep word deur intern in die firma te belê en of waarde vernietig word deur in projekte met 'n negatiewe netto teenswoordige waarde te belê. Waar Tobin se q-waarde groter is as een (q > 1) is die markwaarde van die firma groter as wat dit sal wees om die vaste bates en voorraad te vervang. Sodoende word waarde geskep. Firmas met 'n q-waarde van minder as een word aanbeveel om eeeder dividende uit te betaal as om die beskikbare fondse in projekte met 'n negatiewe netto teenswoordige waarde te investeer. Meer as 200 verskillende metodes bestaan om Tobin se q-waarde te bereken. Deur die kompleksiteit van die algoritme te vergroot om q te bereken, dra min by tot groter akkuraatheid van die meting. 'n Sterk verband bestaan tussen bo-gemiddelde markopbrengste, aankondigings oor die besteding van vrye kontantvloei en die Tobin q-waarde van die firma. Firmas met 'n hoë Tobin q-waarde moet verseker dat goeie investeringsgeleenthede aangegryp word. Die gebruik van interne fondse om nuwe investering te finansier word deur die mark in 'n positiewe lig beskou en bogemiddelde opbrengste word gelewer. Firmas met 'n hoë Tobin q-waarde en hoë vrye kontantvloei toon laer opbrengste. Hierdie laer opbrengste is as gevolg van die mark wat besef dat die firma nalaat om gunstige interne investeringsgeleenthede te gebruik.
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Ankude, Edem Komla. "Agency costs of free cash flow : the South African experience." Master's thesis, University of Cape Town, 1997. http://hdl.handle.net/11427/9518.
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Includes bibliography.The use of free cash flow has been a source of conflict between shareholders and managers. This conflict derives from the agency relationship between shareholders and managers in that decisions taken by managers (as agents) affect the shareholders (as principals). The decisions of managers may not always be in the interest of shareholders. The interests of shareholders will be served if actions of managers lead to the maximisation of the total value of the company. The free cash flow theory suggests that managers have the tendency to misuse surplus cash resources. Any use of free cash flow that is not value maximising could result in losses to shareholders. These are termed the agency costs of free cash flow. It is believed that managers will think and act as shareholders if they own significant proportions of the equity capital of companies. This dissertation examines the effects of the agency relationship on the utilisation of free cash flow.
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Rascão, Tiago Miguel Ramos. "Equity research - NOS SGPS, S.A." Master's thesis, Instituto Superior de Economia e Gestão, 2020. http://hdl.handle.net/10400.5/21088.
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Mestrado em Contabilidade, Fiscalidade e Finanças EmpresariaisO Equity Research realizado no âmbito do mestrado de Contabilidade, Fiscalidade e Finanças Empresariais do Instituto Superior de Economia e Gestão (ISEG - Universidade de Lisboa) tem como objetivo avaliar o comportamento das ações da NOS SGPS, SA. Foi efetuado um estudo do setor das telecomunicações que está a desenvolver-se cada vez mais a nível tecnológico, sendo hoje um dos serviços fundamentais para o nosso dia-a-dia. A avaliação foi realizada à data de 31-12-2020. Esta avaliação foi efetuada com a aplicação de dois métodos: Discounted Cash Flow com a abordagem Free Cash Flow to Firm e, como complemento à avaliação, o Método dos Múltiplos. No final do estudo, os resultados demonstram que há uma subvalorização, visto que o preço das ações a 31-12-2019 era de 4,80€ (Euronext Lisbon) e o target price calculado no final deste estudo foi de 6,71€ (FCFF). Embora o resultado obtido no Método dos Múltiplos seja contrário, isto representa um upside potencial de 39,83%, sendo a recomendação final, sugerida aos investidores, de compra de ações da NOS.
The Equity Research carried out as part of the master's degree in Accounting, Taxation and Corporate Finance at the Instituto Superior de Economia e Gestão (ISEG - University of Lisbon) aims to evaluate the behaviour of NOS SGPS, SA shares. We analysed the telecommunications sector, which is developing more and more at a technological level, being today one of the fundamental services for our daily life. The evaluation was computed out on 31-12-2020. This evaluation was performed with the application of two methods: Discounted Cash Flow with the Free Cash Flow to Firm approach and, as a complement to the evaluation, the Multiples approach. At the end of the study, the results show that there is an undervaluation, as the share price on 31-12-2019 was 4.80€ (Euronext Lisbon) and the target price calculated at the end of this study was 6,71€ (FCFF). Although the result obtained in the Multiples method is the opposite, this represents a potential upside of 39,83%, with the final recommendation, suggested to investors, to buy NOS shares.
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Huayhuacuri, Rojas Sonia Cleofe, and Zúñiga Brenda Paola Navarrete. "Métodos de Valorización para Empresas Financieras." Bachelor's thesis, Universidad Peruana de Ciencias Aplicadas (UPC), 2020. http://hdl.handle.net/10757/652071.
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El propósito de la investigación ha sido desarrollar las metodologías correspondientes a la valoración de organizaciones empresariales de tipo financiero, debido a que no existe un método definido para valorar a este tipo de instituciones. En el mercado existe una gran variedad de métodos de valoración, algunos de ellos no libres de dificultades en su aplicación práctica. Sin embargo, hay métodos que pueden ser adecuados para valorar a las entidades del sistema financiero, como el Flujo de caja para el accionista (Free Cash Flow Equity), que representa el valor de las acciones; y el Método de flujo de dividendos descontados (DDM por sus siglas en inglés: Dividen Discount Model), que es el precio de la acción de una compañía en función de los dividendos que va a repartir en el futuro; también se analiza el método de descuento de flujos, que literalmente es una de las metodologías menos complicadas; y, finalmente el método de Valorización de Utilidades Retenidas. Estos métodos de valoración permiten al inversionista estimar el valor; y, de esa manera, tomar una adecuada decisión de inversión.The purpose of the research is to develop the methodologies corresponding to the valuation of business organizations of a financial type, because there is no established method for valuing this type of institutions. In the market there is a wide variety of valuation methods, some of them not free of difficulties in their practical application. However, there are methods that may be suitable for valuing the entities of the financial system, such as the Free Cash Flow Equity, which represents the value of the shares; and the Discounted Dividend Flow Method (DDM), which is the price of a company's stock based on the dividends it will distribute in the future; The flow discount method is also analyzed, which is literally one of the least complicated methodologies; and, finally, the method of Valorization of Retained Utilities. These valuation methods allow the investor to estimate the value; and, in that way, make an appropriate investment decision.
Trabajo de Suficiencia Profesional
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Brdička, Karel. "Návrh tržního ocenění podniku." Master's thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2008. http://www.nusl.cz/ntk/nusl-221958.
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This diploma thesis deals with the company valuation. It contains theoretical background of valuation and description of the most important current methods and attitudes towards determination of market, liquidation and book company value. Subsequently, the theoretical methods are applied on the data of company EUROliftCZ s.r.o. Therefore financial, SWOT and strategic analysis is implemented and future development is forecasted. In concluding part different levels of company value are proposed. The outcome of the thesis is to be used by owners of the company.
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Joynson, Robert John. "The identification, expenditures and performance of free cash flow firms in the UK." Thesis, University of Cambridge, 2006. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.614160.
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Churro, Bruno Alexandre da Silva. "The effect of free cash flow, dividend and leverage on earnings management : european evidence." Master's thesis, Instituto Superior de Economia e Gestão, 2018. http://hdl.handle.net/10400.5/17706.
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Mestrado em FinançasEste estudo analisa o efeito do fluxo de caixa livre, do dividendo e do endividamento das empresas na Gestão de Resultados em países da Zona Euro, recorrendo a uma amostra de 2.150 observações empresas-ano, de 2009 a 2016, com enfoque nos impactos sentidos nas variáveis de estudo durante a crise financeira de 2008, e consequentemente a sua relação com Gestão de Resultados. A extensão do modelo de Kothari (2005) ao modelo de Jones (1991) é usada para calcular, de forma aproximada, os accruals discricionários, que são assumidos como uma unidade de medida de gestão de resultados. Este estudo documenta evidências de uma relação negativa significativa entre o fluxo de caixa livre e a Gestão de resultados, enquanto as relações dos dividendos e alavancagem com a gestão de resultados são positivas, em termos de direção. Além do exposto, em termos de quantidade, a relação encontrada é inversa à anterior: significativa e positiva em relação ao fluxo de caixa livre e negativa em relação ao endividamento e aos dividendos.
This study analyses the effect of the free cash flow, the dividend and the companies' leverage on Earnings Management in Euro-zone countries, using a sample of around 2.150 firm-year observations, from 2009 to 2016. I also analyze the 2008 financial crisis impacts on this study's measures and, consequently, its relations to earnings management. The Kothari (2005)'s extension to Jones (1991) model is used to compute a discretionary accruals proxy, which is assumed as a measure of earnings management. This study documents evidence of a significant negative relationship between free cash flow and earnings management, while dividend and leverage correlates to earnings management positively, in terms of direction. Furthermore, in terms of amount, the relationship found is inverse to the previous: significant positive in regarding the free cash flow and negative for leverage and dividend paying firms.
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Pacheco, Ana Filipa Romão. "The impact of free cash flow and agency costs on firm’s performance : european evidence." Master's thesis, Instituto Superior de Economia e Gestão, 2018. http://hdl.handle.net/10400.5/17713.
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Mestrado em FinançasO objetivo deste artigo é investigar como os Free Cash Flows (FCF) e os custos de agência se relacionam e afetam o desempenho da empresa. Em particular, reexaminar a hipótese do FCF e a teoria da agência. Os dados utilizados nesta pesquisa são empresas cotadas em bolsa, da Zona Euro, para o período de 2009-2017. Este estudo contribui para a literatura existente, porque examina a relação entre FCF, custos de agência e desempenho da empresa sob três abordagens diferentes: através da análise da amostra global, do impacto da crise e, finalmente, através de testes de robustez, procurando relações não lineares. Dada a falta de provas para a hipótese do FCF, este artigo defende que as empresas com maior FCF não mostram a presença de comportamentos prejudiciais por parte dos gestores e apresentam melhor desempenho, e a teoria de Pecking Order e o motivo de precaução permanecem válidos na justificação da acumulação de FCF. Ainda, durante uma crise financeira, as empresas com maior nível de liquidez apresentam um aumento no desempenho e valor. Em relação aos custos de agência, as variáveis proxy mostram diferentes efeitos no desempenho da empresa. Assim, este estudo apresenta uma investigação completa que nos oferece uma melhor compreensão da relação entre FCF, custos de agência e o desempenho da empresa.
The purpose of this paper is to investigate how Free Cash Flows (FCF) and agency costs are linked, and how they impact firm's performance. In particular, to revisit the FCF hypothesis and the agency theory. The data used for this research are publicly listed firms, from the Euro Area, for the period of 2009-2017. This study contributes to the existing literature, because it examines the relationship between FCF, agency costs and firm's performance under three different approaches: analysing the overall sample, the impact of the crisis, and finally performing robustness checks, looking for non-linear relationships. Given the lack of evidence for the FCF hypothesis, this paper supports that firms with higher FCF show no presence of managers' shirking behaviour and have better performance, and the Pecking Order theory and the precautionary motive as reasons for hoarding FCF remain valid. Moreover, during a financial crisis, firms with higher level of liquidity still have an increase in performance and firm value. Regarding agency costs, the proxy variables show different effects on firm's performance. So, this study presents a thorough investigation that offers us a better understanding of the relationship between FCF, agency costs and firm's performance.
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Josefsson, Niklas, and Anders Karlsson. "Stock Price Valuation : A Case study in Dividend Discount models & Free Cash Flow to Equity models." Thesis, Internationella Handelshögskolan, Högskolan i Jönköping, IHH, Företagsekonomi, 2011. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-16794.
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Nunes, João Eduardo. "Equity research on BPI bank." Master's thesis, Instituto Superior de Economia e Gestão, 2015. http://hdl.handle.net/10400.5/10680.
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Mestrado em FinançasDurante as últimas décadas, têm vindo a ser criados e desenvolvidos vários modelos de avaliação de empresas. Estes métodos de avaliação, alguns deles com um alto nível de complexidade técnica, têm por objectivo determinar com o melhor grau de precisão, o valor intrínseco de uma empresa. Geralmente, não há resposta certa para o problema da avaliação de empresas. Na minha opinião, o processo de avaliação está mais perto de uma arte do que uma ciência. Que suposições deveram ser feitas, e quais são os métodos mais adequados para seguir ainda continuam em debate, depois de todos esses anos. O objetivo desta dissertação é identificar caracterizando os principais métodos apresentados pela literatura, com o intuito de escolher os que são os mais utilizados, especificamente com o propósito de um equity research sobre empresas financeiras.
During the last decades, it has been created and developed several mechanisms models of business valuation. These evaluation methods, some of them with a high level of technical complexity, aim to determine with the greatest degree of precision, the intrinsic value of a company. Generally, there is no right answer to the problem of valuation of companies. In my opinion, the evaluation process is closer to an art than a science. Which assumptions should be made, and what are the most adequate methods to follow is still on debate, after all this years. The aim of this dissertation is to identify featuring the key methods presented by the literature, in order to peek which of those are the most used ones, specifically with the purpose of an equity research about financial companies.
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Martinho, Paulo Manuel Tomaz. "Métodos de avaliação de bancos : aplicação a uma instituição financeira portuguesa." Master's thesis, Instituto Superior de Economia e Gestão, 2012. http://hdl.handle.net/10400.5/10396.
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Mestrado em FinançasO setor bancário carateriza-se por possui um elevado grau de regulamentação, incerteza e risco. Devido a essas características os métodos de avaliação de empresas não financeiras têm de ser adaptados de forma a poderem ser utilizados numa avaliação bancária. Esta dissertação seleciona uma instituição bancaria portuguesa para demonstrar os métodos de avaliação existentes e aplica-los a uma instituição bancaria portuguesa. Dadas as cateterísticas do banco em análise, da economia e dos métodos utilizados, encontraram-se divergências entre os resultados obtidos pelos vários métodos. Os resultados obtidos são objeto de discussão.
The banking sector is characterized by a high degree of regulation, uncertainty and risk. Due to these characteristics the methods of assessment of non-financial companies have to be adapted in such a way that they can be used in an evaluation. This dissertation selects a Portuguese bank institution to demonstrate the existing assessment methods and applies them to a Portuguese bank institution. Given the Bank's analysis, the characteristics of the economy and the methods used, we found some differences between the results obtained by various methods. The results obtained are subject to discussion.
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D'Mello, Ranjan. "Motivations for a repurchase tender offer : the free-cash-flow and the favorable-prospects hypotheses." The Ohio State University, 1995. http://rave.ohiolink.edu/etdc/view?acc_num=osu1271878640.
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Duarte, Maria Rita de Almeida Fernandes Valentim. "Determinants of cash holdings on start-ups." Master's thesis, Instituto Superior de Economia e Gestão, 2013. http://hdl.handle.net/10400.5/11411.
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Mestrado em FinançasEste estudo tem como objectivo analisar os determinantes da gestão de tesouraria, bem como as suas implicações ao nível das start-ups portuguesas. Recorrendo a uma base de dados que conjuga informação financeira com dados sobre empregado-empregador, para o período entre 2004 e 2009, ficando com uma amostra de 15,693 observações. Ao contrário de estudos anteriores, avaliámos a importância que a gestão de tesouraria assume nas start-ups, examinando como as características educacionais e demográficas dos fundadores estão associadas à sua gestão. Em termos da metodologia, iremos recorrer a uma análise Tobit, onde controlamos a nossa estimação através do ano de referência, industria e NUTS. É possível observar que a gestão de tesouraria nas start-ups é afectada positivamente pelas oportunidades de investimento, dívida de longo prazo e caracteristicas sócio-demográficas e educacionais do fundador. Por outro lado, a gestão de tesouraria nas star-ups é negativamente afectado pela dimensão, activos líquidos e dívida bancária. Para a análise ao nível das NUTS, é possível observar que as região de Lisboa, Centro e Açores apresentam as mesmas caracteristicas. Ao nível da análise por industria, temos que, a dimensão, os activos liquídos e a estrutura da dívida das start-ups está negativamente relacionado com a gestão de tesouraria. Para as caracteristicas do fundador, os níveis educacionais abaixo do nível educacional mais elevado apresentam um impacto negativo na gestão de tesouraria das start-ups. Podemos esperar que o Pecking Order, e a teoria do Trade-off, expliquem os determinantes da gestão de tesouraria das start-ups.
The purpose of this study is to examine the determinants and the implications of cash holding on start-ups for a sample of Portuguese firms. We use a database that combines firm-level financial data with a matched employer-employee database, for the period between 2004 and 2009, presenting a sample of 15,693 observations. Unlike previous studies, we examine which start-ups and founders' educational and social-demographic characteristics are more likely to be associated with cash holdings. In terms of methodology, it is conducted a Tobit analysis where we control for year, industry and NUTS in the estimation of our model. It is possible to observe that start-ups cash holding levels are positively affected by investment opportunities, long term debt and founder's characteristics and the contrary for start-ups size, liquid assets substitutes and bank debt. When analyzing by NUTS, it is possible to see that the regions of Lisbon, Center and Azores present the same characteristics. Finally, at the industry level: size, liquid assets and debt maturity structure are negatively related with cash holdings across industries. While for founder's characteristics, the educational levels below the higher level of education have a negative impact over start-ups cash holding levels. We can conclude that the Trade-off Theory and the Pecking Order Theory are the ones that play the most important role in explaining the determinants of Portuguese firm's cash holdings.
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Stoffers, Rickard, and Deibrant Helena Eriksson. "Business Valuation : A study of the accuracy of the free cash flow to equity approach and the dividend discount model." Thesis, Internationella Handelshögskolan, Högskolan i Jönköping, IHH, Företagsekonomi, 2019. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-43883.
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Background: In an inefficient market, the intrinsic value of an asset may not be equal to its true market value. Therefore, before engaging in a stock transaction, both the seller and the buyer would want to know the intrinsic value of the stock as neither would want to lose money during the process. An effective valuation model enabling investors to efficiently determine firm values is therefore considered to be a crucial factor. Purpose: The purpose of this thesis is to analyze the free cash flow to equity (FCFE) approach and the dividend discount model (DDM) on 30 Swedish companies. This to conclude if they are considered to be accurate valuation models and to determine if one of the methods gives a more accurate estimation of the companies’ share prices than the other. Additionally, the report will examine if one model is preferred for a specific sector and if a payout ratio exists where the DDM generates a particularly realistic valuation. Method: A database will be produced to estimate share prices for each company using both the FCFE approach and the DDM over five consecutive years. The accuracy of the models will be evaluated by dividing the projected share prices with their corresponding actual stock prices to calculate the percentage deviations. The smaller the percentage deviation, the more accurate is the estimated share price considered to be. Conclusion: It is evident from the findings of this thesis that the FCFE approach and the DDM produce accurate valuations for Swedish companies. It is difficult to determine that one is preferred over the other altogether, instead the FCFE approach is preferred in some cases and the DDM in others. This depends on the companies’ actual stock prices, which industry the companies operate in and the amount the companies are assumed to pay out as dividends.
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Bayat, Babolghani Babak, and Sebastian Reuter. "A study on profitability of Nordic large cap companies, effects of free cash flow and debt." Thesis, Umeå universitet, Företagsekonomi, 2018. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-150154.
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This paper has studied the relationship between free cash flow & debt with profitability of the Nordic Nasdaq large cap for the period of 2012-1017. Population of the study consists of 223 Nordic companies listed in Nasdaq. From this population a sample of 100 companies from different sectors have been chosen by random sampling, but the sample does not include financial institutions because the way these kinds of institutions are financing differ from companies in other sectors. Data has been collected from Eikon program which provides financial information about the listed companies around the world based on the company's audited financial statements. validity and reliability of the data have been checked to make sure the data are not wrong. In this study, free cash flow, debt to equity ratio & debt ratio are considered as independent variables and profitability of the firm has been considered as dependent variable. In addition, diversity of the companies based on the countries they are established in is considered as dummy variable. Profitability of the firms have been measured by return on asset. The research philosophy is positivism and the research approach is deductive. Based on a quantitative research in which secondary data has been analyzed by running the Pearson correlation analysis and regression analysis. Result of the study revealed that; free cash flow has a positive effect on profitability of the Nordic Nasdaq large cap. In addition, the result of study showed that; debt ratio has negative effect on profitability of the targeted firms. But, the result showed that; the debt to equity ratio does not affect profitability of the firms. The result of running dummy variable revealed that; companies in Finland have 2,3 % lower return on assets compared with the companies located in Denmark. Also, the companies established in Sweden have a 2,3 % lower return on assets compared with Denmark.
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Abreu, Taniuska Lisani Pestana de. "Equity research - Brisa." Master's thesis, Instituto Superior de Economia e Gestão, 2014. http://hdl.handle.net/10400.5/11665.
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Mestrado em FinançasO tema avaliação de uma empresa é hoje considerado de importância central para as empresas, pelo impacto que o valor obtido reflecte em determinados eventos tais como investimento e financiamento. O presente trabalho tem como objectivo a realização de um equity research sobre a empresa Brisa - Auto-estradas de Portugal S. A, de forma a obter um preço-alvo das acções da mesma com referência a Dezembro de 2012. Conforme a revisão da literatura e a análise da empresa e do sector efectuada, devido à instabilidade do rácio da dívida, será utilizado o método Adjusted Present Value (APV), e o método dos múltiplos. Esta avaliação permite concluir que as acções da Brisa, à data 31/12/2012, estavam subavaliadas, ou seja, estavam cotadas abaixo do seu valor intrínseco 5,05 euros, apresentando assim um potencial de valorização de 136%.
Nowadays, business valuation is considered crucial to the companies, for the impact that the value obtained reflects in certain events such as investment and financing. The present work aims at realization of an Equity Research about the company Brisa ? Auto ? Estradas de Portugal, S.A, in order to get a target price of the shares at December 2012. According with the literature review and the analysis of company and the sector presented, due to the variability of the debt ratio, the Adjusted Present Value (APV) method will be use, as well as, the multiples method. This valuation allows to conclude that Brisa stocks, on 31/12/2012, were undervalued, in other words, were quoted below their intrinsic value 5,05 euros, so presenting a potential appreciation of 136%.
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Daysal, Sercan. "Equity Research of Turkish Airlines." Master's thesis, Instituto Superior de Economia e Gestão, 2014. http://hdl.handle.net/10400.5/7718.
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Mestrado em FinançasA Turkish Airlines (THY) é a companhia aérea nacional da Turquia e tem como objetivo ser uma referência global no setor das companhias aéreas. A THY tem uma vantagem competitiva dada a sua localização central em Istambul. O Trabalho Final de Mestrado que se segue tem como objetivo principal a estimatıva do valor intrínseco das ações da THY, a partir de Dezembro de 2013. Este projeto inclui uma revisão literária aos diferentes métodos de avaliação, enfatizando os seus pontos fortes e fracos. É feita uma análise específica ao nível do sector e da empresa. Procede-se uma avaliação da THY através do método Discounted Cash-Flow, resultando um valor intrínseco de 8,08 TL por ação, indicando uma subvalorização face ao preço atual de 6,44 TL. Esta avaliação indica um potencial de valorização na ordem dos 25,53% do preço por ação. Por fim, aplica-se o método de avaliação relativa para estimar a posição da THY no seu sector de atividade.
Turkish Airlines (THY) is the flag carrier airline of Turkey and it aims to be a permanent global actor in the airlines sector. THY considers itself having a constant competitive advantage since it is located on a natural hub, Istanbul. The following Master's Final Work is completed with an aim of discovering an intrinsic value for the stocks of THY as of December 2013. This project includes a literature review presenting pros and cons of different valuation techniques followed by an industry and company specific analysis. It continues with the actual valuation of THY performed by using Discounted Cash-Flows method. The final outcome using this method suggested an intrinsic value of 8.08 TL for THY stocks of those are undervalued with a price of 6.44 TL. This result indicates a 25.53% potential appreciation of the stock price for THY. Finally, relative valuation method is also applied to identify THY's position compared to how other companies in airline industry are being evaluated.
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Santos, Pedro Miguel Matos dos. "Investment in new HUB for Oil & Gas Engineering Centres by Oil & Gas Services Companies." Master's thesis, Instituto Superior de Economia e Gestão, 2014. http://hdl.handle.net/10400.5/7882.
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Mestrado em FinançasO renovado interesse na indústria petrolífera coloca-a no topo da lista de prioridades de investimento estrangeiro para alguns países. A competitividade empresarial é um factor bastante importante numa Sociedade global e, como tal, um factor que não pode ser descurado a este nível. O objectivo deste trabalho assenta no estudo de uma decisão de investimento referente à possível expansão da actividade de empresas prestadoras de serviços na indústria petrolífera. Além da definição do enunciado da situação, uma resolução é apresentada. Esta resolução assenta em três metodologias distintas: - Modelo Free Cash-Flow; - Análise Strengths, Weaknesses, Opportunities e Threats (SWOT); - Modelo Matriz Híbrida. O modelo de Free Cash-Flow permitiu considerar os custos de capital de cada empresa e chegar a uma conclusão sobre o país/local que apresenta as métricas financeiras mais apelativas. A análise SWOT oferece-nos uma visão mais generalista acerca dos países considerados sobre a perspectiva de investimento.. Com o intuito de analisar factores estratégicos induzidos por parâmetros externos (de forma a não considerar apenas métricas financeiras), foi criada uma Matriz Híbrida e foi realizada a respectiva análise. Neste seguimento, os resultados apresentados pelo Modelo de Matriz Híbrida deverão ser considerados aquando da decisão de expansão. Foi possível concluir que a melhor opção base é a criação de um escritório em Portugal. Apesar desta conclusão, a solução óptima é observada quando contabilizamos os custos de abrir um escritório em Portugal e quando, simultaneamente, consideramos os impostos que são pagos na Holanda (devido à sua política de impostos mais atractiva).
The renewed interest in the Oil & Gas sector places this Industry at the top of the list of priorities for some countries in order to attract foreign investment. Corporate competitiveness is, therefore, an extremely important vehicle for a globalized Society. The aim of the present work was to study the possible investment contemplated by an expansion decision taken by some Oil & Gas Services companies. Besides the definition of the problem, an adequate resolution is also presented. This resolution is sustained by three distinct methodologies: - Free Cash-Flow Model; - Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis; - Hybrid Matrix Model. The Free Cash-Flow Model enabled us to consider costs of capital and come to a decision regarding the country that presented the best financial results. The SWOT analysis provided a more generalist view over the several analysed countries. With the purpose of analysing strategic factors induced by external parameters (besides the financial field), the Hybrid Matrix Model was created and a study was carried out. Subsequently, the results presented by the Hybrid Matrix Model shall be taken into account when choosing a location for an international expansion. It was possible to conclude that the best base scenario is observed when opening an Office in Portugal. However, the optimal solution would be opening an Office in Portugal and account the profits/losses in the Netherlands, mixing the country that presents the lowest costs with the country that has the best taxation policies.
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Baião, Marcos Miguel Lourenço dos Santos. "Equity Research - Pfizer Inc." Master's thesis, Instituto Superior de Economia e Gestão, 2015. http://hdl.handle.net/10400.5/10705.
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Mestrado em FinançasA Pfizer Inc é uma empresa líder no desenvolvimento e comercialização de produtos biofarmacêuticos com um portfólio global que inclui medicamentos e vacinas, bem como diversos produtos de cuidados de saúde mundialmente conhecidos. Nos últimos anos, a empresa tem crescido essencialmente através de fusões e aquisições. Em fevereiro de 2015, a Pfizer adquiriu a Hospira, Inc., líder mundial na comercialização de medicamentos injetáveis e tecnologias de infusão, bem como no desenvolvimento de biosimilares. O objetivo deste projeto é determinar o valor intrínseco das ações da Pfizer através de uma análise detalhada do desempenho operacional e financeiro da empresa, assim como da indústria e ambiente macroeconómico em que se insere. O método de avaliação usado para determinar o valor intrínseco da Pfizer foi o método do Free Cash Flow to the Firm, o qual, de acordo com a literatura, se apresenta como o modelo mais adequado dadas as características da empresa. De acordo com os pressupostos assumidos, a Pfizer tem um valor final de $249.380,2 milhões que, atualizado ao custo médio ponderado do capital de 8,89%, corresponde a um valor atual de $223.412,6 milhões. Atualmente a empresa tem $6.167,4 milhões de ações disponíveis à negociação, o que leva à obtenção de um preço da ação de $36,23. Tendo em conta que o preço atual da ação da Pfizer é de $33,18, pode-se concluir que o preço da ação se encontra subvalorizado.
Pfizer Inc is a leading company in manufacture and sale of biopharmaceutical products with a global portfolio that includes medicines and vaccines as well as many of the world's best known consumer health care products. In recent years, the company has grown by mergers and acquisitions. In February 2015, Pfizer acquired Hospira, Inc., the world's leading provider of injectable drugs and infusion technologies and a global leader in biosimilars. The goal of this project is to determine the intrinsic value of Pfizer´s shares through a detailed analysis of the company's operational and financial performance as well as the industry sector and macroeconomic environment. The valuation method used to determine Pfizer´s intrinsic value was the Free Cash Flow to the Firm method which, according to the literature review, is the most appropriate method given the company´s characteristics. According to the assumptions defined, Pfizer has a terminal value of $249.380,2 million, with a present value of $223.412,6 million using, as discount rate, the weighted average cost of capital of 8,89%. Currently the company has $6.167,4 million outstanding shares which leads to a share price of $36,23. Given Pfizer's current share price of $33,18 the share price is undervalued.
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Oliveira, Filipa Dias Fiúza de. "Trabalho de projecto - Equity Research Efacec." Master's thesis, Instituto Superior de Economia e Gestão, 2014. http://hdl.handle.net/10400.5/7632.
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Mestrado em FinançasEfacec é uma empresa que tem sofrido diversas alterações ao longo do tempo, passando de uma pequena empresa industrial para o maior grupo português no campo eléctrico. As suas principais características são o mercado internacional, o constante investimento em inovação e as novas tecnologias. Para além disso tem uma força de trabalho altamente qualificada, resultando numa posição persistente na vanguarda dos sectores em que desenvolve as suas atividades. O principal objectivo deste projeto é a determinação do valor intrínseco das ações da Efacec, através de uma análise detalhada da performance operacional da empresa, o seu ambiente externo e as suas perspectivas de crescimento. A avaliação foi baseada no método Free Cash Flow to Firm, o que de acordo com a revisão da literatura é o melhor método para avaliar a Efacec. De acordo com os pressupostos definidos, o valor da Efacec é 401.666.793 euros e o valor acionista é 12.457.793 euros (0,30 euros por ação). Como a Efacec não é uma empresa cotada em bolsa, o múltiplo Price Earnings Ratio foi usado para decidir se os investidores devem ou não comprar as suas ações. Tendo isto em conta, o indicador da Efacec de 1,51 é extremamente baixo comparativamente ao seu peer group (14,60). Consequentemente, o valor das ações da Efacec está desvalorizado, apesar de ser considerada umas das maiores multinacionais portuguesas. Portanto, a recomendação é de não comprar as ações da Efacec.
Efacec is a company that has undergone several changes, going from being a small industrial company to the largest group in the electric field. Its core emphases are the international market among its constant investment in innovation and new technologies. Furthermore, it has a highly skilled workforce resulting in a persistent position at the forefront of the sectors where it develops its activities. The goal of this project is to determine the intrinsic value of Efacec's shares, through a detailed analysis of the operational performance of the company, its external environment and its growth prospects. The valuation was based on the Free Cash Flow to Firm method, which according to the literature review represents the best method to assess Efacec. According to the assumptions defined, the firm value of Efacec is 401.666.793 euros and the equity value is 12.457.793 euros (0,30 euros per share). Since Efacec is not a quoted company the Price Earnings Ratio multiple was used to decide whether or not if investors should buy the shares. Taking this into account, the indicator for Efacec of 1,51 is extremely low when compared with its peer group (14,60). Consequently, Efacec's share price is undervalued, despite being considered one of the largest Portuguese multinationals. Thus the recommendation is not to buy Efacec shares.
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Carneiro, Ana Beatriz Jorge. "Equity Research - Meliá Hotels International." Master's thesis, Instituto Superior de Economia e Gestão, 2016. http://hdl.handle.net/10400.5/12645.
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Mestrado em FinançasO objetivo deste projeto é estimar o valor intriseco das ações do Grupo Meliá, utilizando para o isso o método de avaliação mais adequado às características da firma estudada, através de uma análise detalhada da empresa, do Grupo e do seu ambiente externo. Esta avaliação foi baseada com no método Free Cash Flow to the Firm que, de acordo com a revisão de literatura, é a melhor metodologia para a avaliar a empresa. Nesta pesquisa, o Grupo Meliá Hotels International, é avaliado em €2 878M, o que conduz a um price tarfe de €12,53 por ação. Como tal, o preço teórico está acima do preço de mercado, então, é dada uma recomendação de compra para estas ações.
The purporse of this project is to estimate the intrinsic value of the Meliá's shares using the most adequated valuation approaches to the features of the studied firm and trough a detailed analysis of the firm, the Group and its external environment. This valuation was based on the Free Cash Flow to the Firm method, which according to the Literature Review is the best methodology to evaluate the company. In this research, Melia Hotels International is valued at €2 878M, which leads to a target share price of €12,53. Therefore, the theoretical price is above the quoted share price. Thus, a buy recommendation is given for this company shares.
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Julficarali, Sara. "Equity research - Sumol+Compal." Master's thesis, Instituto Superior de Economia e Gestão, 2015. http://hdl.handle.net/10400.5/10681.
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Mestrado em FinançasA Sumol+Compal é a líder do setor das bebidas não-alcoólicas, e a única empresa portuguesa de bebidas cotada no índice NYSE Euronext Lisboa. Detendo uma quota de mercado superior a 25%, a empresa foca a inovação e a diversificação como parte da sua estratégia. Desta forma, conseguiu aumentar as suas vendas e expandir o seu negócio, fortalecendo o seu posicionamento internacionalmente. Através de uma análise detalhada à empresa e aos seus resultados, aos objetivos e estratégias da empresa, e à indústria envolvente, este trabalho pretende avaliar a Sumol+Compal e determinar um preço às suas ações. O método utilizado para a avaliação foi o Free Cash Flow to the Firm (FCFF), uma vez que de acordo com a revisão de literatura, era o método mais adequado à empresa. Através dos resultados da avaliação, foi possível concluir que as ações da Sumol+Compal estão subavaliadas. O preço a 31 de Agosto de 2015 foi de 1,90€, sendo menor que o preço da avaliação (2,06€). De 31 de Dezembro de 2014 a 31 de Agosto 2015, o preço subiu quase 70%, de 1,13€ para 1,90€. Desta forma, a recomendação de compra seria dada aos investidores, na medida em que poderiam ter maiores retornos no futuro.
Sumol+Compal is the leader of non-alcoholic beverages in Portugal and the single Portuguese beverages firm present on the NYSE Euronext Lisbon. Having a market share superior to 25%, the firm focuses on strategies based on innovation and diversification. As a result, the company managed to increase its sales and expand its business, strengthening their footprint internationally. Through a detailed analysis of the firm and its results, its future goals and strategies, and its industry, this project aims to evaluate Sumol+Compal and determine a fair value of its shares. The valuation used was Free Cash Flow to the Firm (FCFF) method, once according to the literature review, fitted best the company. From the results obtained in the valuation, it was possible to conclude that Sumol+Compal's shares are undervaluated. The price quoted at 31 of August 2015 was 1,90€, which is lower than the target price reached of 2,06€. From 31 of December 2014 to 31 of August 2015, the price rose almost 70%, from 1,13€ to 1,90€. Hence, the recommendation to future investors would be to buy the shares, once they may provide larger returns in the future.
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Fakhfakh, Ben Amar Ines. "Free cash flow, gestion des résultats et gouvernement des entreprises : étude comparative des entreprises françaises et américaines." Reims, 2009. http://www.theses.fr/2009REIME007.
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Notre thèse est organisée en deux parties. La première partie consacrée au développement théorique des concepts et des prédictions comprend trois chapitres. Dans le cadre de la théorie de free cash flow (FCF), nous avons exposé dans un premier chapitre les définitions, les mesures ainsi que les utilisations possibles de FCF. Nous avons exposé également quelques exemples des investissements non rentables qui justifient le recours des dirigeants à la gestion des résultats. Nous avons abordé, dans le cadre du deuxième chapitre, la relation entre le FCF et la gestion des résultats, où nous avons analysé les définitions, les motivations, les mesures de la gestion des résultats ainsi que les recherches qui expliquent cette relation. Le troisième chapitre est consacré à présenter les différents modes de gouvernement et leurs effets de modération sur la relation entre la gestion des résultats et le FCF. Un ensemble d’hypothèses testables est proposé. Par ailleurs, nous avons essayé d’examiner le comportement des entreprises en matière de gestion des résultats dans un contexte international. La deuxième partie de notre thèse est consacrée à l’application empirique de notre modèle théorique. Ainsi, le quatrième chapitre expose la définition des aspects méthodologiques, les procédures d’échantillonnage et de collecte des données ainsi que l’analyse et la discussion de nos résultats empiriques. A la fin, nous avons présenté une conclusion générale qui synthétise nos développements théoriques et les résultats empiriques tirésOur thesis is organized in two parts. The first part presented theoretical development of concepts and predictions. He includes three chapters. In the first chapter, we exposed definitions, measures and uses of free cash flow (FCF). We also presented some examples of the unprofitable projects which justify motivation of managers to the earnings management. We approached, within the framework of the second chapter, the relation between FCF and earnings management, where we analyzed the definitions, motivations, measures of earnings management as well as research which explains this relation. The third chapter examines the impact of gouvernance structures in mitigating the relation between earnings management and FCF. A whole of testable hypothesis is proposed. In addition, we tried to examine the behavior of firms as regards earnings management in an international context. The second part of our thesis is devoted to the empirical application. Thus, the fourth chapter describes methodological aspects, the sample and data-gathering as well as analysis and discussion of empirical results. At the end, we summarizes our theoretical developments and empirical results
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Quinta, André Filipe Rodrigues. "Contabilidade e avaliação de empresas : aplicação prática do residual income model." Master's thesis, Instituto Superior de Economia e Gestão, 2018. http://hdl.handle.net/10400.5/17766.
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Mestrado em Contabilidade, Fiscalidade e Finanças EmpresariaisO presente trabalho tem como principal objetivo demonstrar a utilização do Residual Income Model (RIM). O trabalho é desenvolvido tendo uma abordagem teórica e prática da aplicação do Residual Income Model, sendo constituído pelo enquadramento teórico do modelo e de avaliação de empresas, bem como por um business case de aplicação prática do modelo à Airbus. O segundo objetivo é comparar a utilização do RIM com uma das metodologias mais aceites na avaliação de empresas, o Discounted Free Cash Flow to Equity (DFCFE). O caso é assim resolvido pelos dois modelos, o RIM e o DFCFE, de forma a comparar os procedimentos e os resultados obtidos por cada modelo. Para a conceção do business case foram utilizados unicamente dados reais, disponíveis publicamente, e está estruturado de forma a permitir diferentes abordagens e conclusões. O intervalo de preços obtido representa um desvio face à cotação no período de referência de 33% para o RIM e -16% para o DFCFE. Os resultados expõem a dificuldade de implementar os mesmos pressupostos para ambos os modelos, que podem ser influenciados tanto pelos dados considerados como pelos procedimentos utilizados para o forecast, nomeadamente no que diz respeito ao grau de detalhe necessário para os modelos. Ao mesmo tempo, os valores obtidos servem referência de intervalo de preço para o que poderá ser o valor justo da ação da Airbus.
The current project aims to demonstrate the application of the Residual Income Model. The project is based both on a theoretical and practical approach, consisting of a framework regarding the model itself and enterprise valuation, as well as a business case with the practical application of the model to Airbus. The second objective is to compare the model with one of the most accepted methods, the Discounted Free Cash Flow to Equity. Therefore, the case is solved by using two different approaches, the Residual Income Model and the Discounted Free Cash Flow to Equity, in order to compare the procedures and obtained results through each model. For the business case conception, only real and publicly available data was used, and it is structured to allow different approaches and conclusions. The obtained price range represents a variance from the price per share at the reference date of 33% through RIM and -16% through DFCFE. The results disclose the difficulty of implementing the same assumptions for both models, which can be influenced both by the methods used for the forecast as by the considered data, specifically to what regards the degree of detail required for the models. At the same time, the results can serve as a reference for the price range of what might be the fair price of Airbus' shares.
info:eu-repo/semantics/publishedVersion
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Yeoh, Daniel Ghee Chong, and danielyeoh@cimb com my. "An Empirical Examination of Physical Asset Expenditure Announcements in Australia: Growth Opportunities, Free Cash Flow and Capital Market Monitoring." The Australian National University. Commerce, 2001. http://thesis.anu.edu.au./public/adt-ANU20010702.160428.
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This thesis examines the stock market price variations associated with physical asset expenditure announcements in Australia. With the exception of the study of Chen and Ho (1997) in Singapore, most capital expenditure studies in other markets investigate the announcement effects associated with changes in budgeted capital expenditures. The fact that there is almost never any firm level capital budget announcement in Australia presents a unique opportunity to examine individual physical asset expenditure announcements.
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Three primary hypotheses pertaining to growth opportunities, free cash flow theory, and the capital market monitoring argument are developed and tested. These arguments are formulated to explain the abnormal return variations associated with physical asset expenditure announcements. The growth opportunities hypothesis posits that the abnormal returns at physical asset expenditure announcements are positively related to a firm's growth opportunities. Both free cash flow theory and capital market monitoring hypothesis postulate that the abnormal returns at physical asset expenditure announcements are negatively related to a firm's free cash flow, and cash flow respectively. Other control explanators are incorporated from the merger and takeovers literature.
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Event study methodology is used to examine the abnormal returns associated with physical asset expenditure announcements. Two sets of data, intraday and daily, are used to investigate the market reaction. Intraday returns are calculated on a time-weighted approach and two methods are used to calculate intraday abnormal returns. The first method defines abnormal returns as the difference between actual returns and market returns. The second method defines abnormal returns as the difference between market-adjusted returns and market-adjusted returns on a control portfolio. Daily abnormal returns are calculated using the market model.
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Both univariate and multivariate analyses provide strong support for the growth opportunities hypothesis. The results suggest the quality of firms' growth opportunities is the key variable determining the direction and magnitude of the abnormal returns at announcement. Support for the capital monitoring argument and the free cash flow theory is mixed, generally with a lack of support. The free cash flow variable is found to be significantly negatively related to abnormal returns, only when a finer dummy is used in the multivariate regression. All other control variables are found to be insignificant in explaining the stock market variations once the growth opportunities variable is included in the regression.
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This thesis makes the following contributions. First, this thesis presents the initial empirical evidence concerning physical asset expenditure announcements in Australia. Second, the thesis shows that the quality of a firm's growth opportunities is the key factor in determining the direction and magnitude of abnormal returns around physical asset expenditure announcements. These results also suggest that the equity market in Australia reacts to physical asset expenditure announcements which contain information pertaining to growth opportunities rather than the relative size of the physical asset expenditure transactions to firm value. Third, support for the capital monitoring argument and the free cash flow theory is not strong. Fourth, all other control variables are found to be insignificant in explaining the stock market variations once market to book ratio is included in the regression. Fifth, the results suggest that prior research which fails to segregate market to book ratio and free cash flow proxy into finer partitions may have possibly underestimated the market to book and the free cash flow effects.
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Mei-PeiWu and 吳枚珮. "Free Cash Flow and Corporate Governance." Thesis, 2011. http://ndltd.ncl.edu.tw/handle/18330864710370173075.
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Hsiu, Wen-Chi, and 許文吉. "The Management Quality and Free Cash Flow." Thesis, 2006. http://ndltd.ncl.edu.tw/handle/et4tqy.
Full textAbstract:
碩士銘傳大學
財務金融學系碩士班
94
There are some embezzlement cases in Taiwan listed companies recently. Those were partly resulted from free cash flow problem. Because cash is the most important liquid asset in the company, how management does with it and lower agency problem are important issue. In this research, I use regression to examine the relationship between the management quality and free cash flow and try to find out their impacts on corporate performance. It shows that EPS, ROA, OE and PMBA can measure management quality adequately. And high management quality firms will hold more cash flow than those of low quality significantly. The main factors of high management quality companies hold high free cash flow are considering firm growth opportunity and R&D expenditure. The low management quality companies hold low free cash flow are influenced by low firm growth opportunity, high risk and low credit rating. Besides, the performance of high management quality firms with high free cash flow is also better than the opposite with low free cash flow.
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LIN, SHANG-MEI, and 林尚美. "The Free Cash Flow and Corporate Governance." Thesis, 2016. http://ndltd.ncl.edu.tw/handle/92021150373951040720.
Full textAbstract:
碩士輔仁大學
會計學系碩士班
104
The purpose of this study is to investigate the association between the systems of corporate governance and free cash flows. According to Jensen’s theory (1986, 1989), the conflicts between managers and shareholders are severe in firm with large cash flows—more cash than profitable investment opportunities. We argue that the system of corporate governance could mitigate these conflicts. Adopting the result of the Corporate Governance Evaluation System for the year 2014 and 2015 from the Corporate Governance Center of Taiwan Stock Exchange, this study observes and analyzes the associations between the corporate governance and free cash flows, a proxy of agency costs. We use the ratio of market to book of the equity value to proxy the growth opportunity, and test our hypotheses. Two hypotheses were develop in this study. Hypothesis I: those firms with low growth opportunities and the high free cash flow, their managers tend to use higher discretionary accruals to manipulate earnings. Hypothesis II: those firms with low growth opportunities, high free cash flow and the better corporate governance, their managers tend to use less discretionary accruals to manipulate earnigns. However, we couldn’t find any evidence to support our conjecture from this study.
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Chen, Chung Ching, and 陳崇欽. "Free Cash Flow Hypothesis and Investment Behavior." Thesis, 1993. http://ndltd.ncl.edu.tw/handle/31015937020467389892.
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Chu, Wan-Yu, and 朱婉瑜. "Dynamic Relationship Between Net Income, Free Cash Flow and Investment Cash Flow of Business." Thesis, 2019. http://ndltd.ncl.edu.tw/handle/w27v95.
Full textAbstract:
碩士國立交通大學
經營管理研究所
107
Business’solvency and value can be evaluated by free cash flow, that is , a corporate’s operation ability to make money and When repaying loan and encountering crisis, whether business has enough resource. However, free cash flow arise agent problems because Information asymmetry exist between manager and business owner, and they might have different intention toward benefit. As a result, manager might pursue their max profit, this is agent cost behind free cash flow and also made it a arguable issue. In hope of discover the dynamic relationship between net income, free cash flow and investment cash flow, this article is based on agent thesis and free cash flow hypothesis, and our empirical results show that Stocks Holding Ratio by Directors and Supervisors would influence the relationship and also changed by industries and business scale.
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Pan, zhao-yi, and 潘昭儀. "Dividend announcements and Tobin''s Q theory: cash flow signaling VS. free cash flow hypothesis." Thesis, 1997. http://ndltd.ncl.edu.tw/handle/19954425231552607997.
Full textAbstract:
碩士國立彰化師範大學
商業教育學系
85
Under the cash flow signaling hypothesis, the dividend change provides information about current and/or future cash flows, while under the free cash flow hypothesis, the dividend change provides information about changes in the managers* misuse of cash flows. Based on the theoretical dispute, this research analysis the potential explanations for wealth effects surrounding dividend change announcements. The object of this research: (1) To analyze the differences in firm characteristics between high-Q and low-Q firms. (2) To undersdand the stock price and volume reactions to dividend change announcements. (3) To investigate the extent to which dividend changes are associated with changes in cash flow expectations. (4) To probe into that whether dividend change announcements are associated with revisions in analysts* current earnings forecasts or not. The results of the empirical analysis are: (1) For both dividend increases and decreases, the differences in dividend change, firm size, yield, and risk change between high-Q and low-Q firms are significant. (2) Dividend increase announcements period have positive impact on stock prices, and dividend decrease announcements period have negtive impact on stock prices. This result is consistent with the cash flow signaling hypothesis. (3) Dividend increase announcements period have positive impact on tra
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Chang, Ya-yi, and 張雅儀. "Market Reaction and Free Cash Flow of IPOs." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/92925872606257868506.
Full textAbstract:
碩士國立中正大學
財務金融所
97
This paper examines the relationship between initial public offering (IPO) long-run stock performance and the amount of cash raised by the firm in the offering.The result is that IPOs raising more cash have poor long run performance. The evidence suggests that the market underreacts to free cash flow related agency problems in IPOs.Moreover, IPO long-run performance is more sensitive to the new cash raised in the offering if an IPO firm has lower capital expenditure or higher opening bid-ask spread.
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Chia-HsiangWeng and 翁嘉祥. "Saving Cash from Share Issuance and Agency Problem of Free Cash Flow." Thesis, 2014. http://ndltd.ncl.edu.tw/handle/694htq.
Full textAbstract:
碩士國立成功大學
財務金融研究所
102
This paper examines whether cash-rich firms accumulating cash from share issuance are still likely to demonstrate agency problem by undertaking value-decreasing acquisitions. Agency problem of free cash flow predicts cash-rich acquirers to engage in value-decreasing acquisitions. However, as equity financing is costly and involves monitoring power from investors, the motives of accumulating cash from equity issuance is expected for funding valuable investment opportunities. By examining the relation between cash saving from equity issuance and acquisition returns, our findings show that cash savings from share issuance do encourage acquisition decisions, and are positively related to acquirers’ announcement returns and post-merger performance.
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Chen, Yuching, and 陳佑晴. "Abnormal Expenditure, Free Cash Flow And Underpricing Of IPOs." Thesis, 2012. http://ndltd.ncl.edu.tw/handle/23640933673869188637.
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碩士靜宜大學
會計學系
100
This paper aims to investigate the impact of corporate abnormal expenditure on under-pricing of IPO. With the innovation of science and technology, the companies are expected to continue of expand and update the investment behavior to enhance their competitiveness. The company's investment expenditure, the managers as earnings manipulation tools, companies and external investors in the information asymmetry will affect the under-pricing of IPO. The research is targeted to the IPO in Taiwan from 2005 to 2007. Capital expenditures and R&D expenditures to measure the abnormal expenditure, and to further explore the impact of corporate free cash flow on under-pricing of IPO. Our empirical results suggest that the higher abnormal capital expenditures does not affect IPO under-pricing. However, our empirical results suggest that higher abnormal R&D expenditure will lead to the IPO under-pricing is more complexity will escalate with high of free cash flow. In asymmetric information, agency problems between companies and investors, will allow the company for earnings manipulation the effect of under-pricing of IPO.
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Hsu, Wan-Ju, and 許椀茹. "The Relation of Free Cash Flow and Real Earnings Management." Thesis, 2013. http://ndltd.ncl.edu.tw/handle/45927835938675058435.
Full textAbstract:
碩士東吳大學
會計學系
101
In the 1986, the American scholar named Michael C. Jensen proposed the free cash flow hypothesis, discussing the agency cost of the free cash flow. Due to the development and decay of petroleum industry, he found out that if firms keep the free cash flow but don’t have the appropriate investment plans, then firms should return the cash to stockholders. When companies need capital after that behavior, it should raise capital on the open market. When the firms with low-growth opportunities and keep the high degree of free cash flow are more likely to invest the capital in unprofitable projects, and these kind of agency problem could lead to real earnings management for covering the manager’s inefficiency action. For another subject, based on the Sarbanes-Oxley Act, the public companies should set up the audit committee. This article wants to discuss whether if the members of the audit committee had specific license or work experienceaccord with the definition of financial expertise can improve the power of monitoring for corporate governance. This research uses the data from Compustat and the year observations over the period 2002-2011. The results show the firms have the agency problem will tend to use the abnormal cash flow from operation and abnormal discretionary costs to increase the earnings. And when the ratio of financial expertise in the audit committee getting higher, it can restrain the degree of the abnormal cash flow from operation and abnormal production costs.
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楊廷鴻. "Sensitivity of free cash flow performance of the Company's remuneration." Thesis, 2014. http://ndltd.ncl.edu.tw/handle/24865040863519080466.
Full textAbstract:
碩士國立彰化師範大學
財務金融技術學系
102
This study aims to examine the sensitivity of the associated free cash flow performance and remuneration. Samples taken from 2009 to 2012 between 7772 observations Chinese mainland, when the company has a lot of free cash flow, the agency problem between the manager and the dividend policy to shareholders will be more severe, managers hope to return cash to shareholders and not continue to invest less than the cost of capital under the project, or wasted in inefficient organization. The empirical results of this paper found that when the higher the company's free cash flow, if managers can get their fair share, plus debt of oversight mechanisms, will bring better harvest
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Barata, Manuel Horta Martins. "Análise de crédito obrigacionista: grupo Semapa." Master's thesis, 2015. http://hdl.handle.net/10071/11320.
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JEL Classification System: G30, G32Este projeto tem como objetivo atestar a capacidade de uma empresa ou grupo económico, neste caso, a Semapa SGPS, em dar resposta aos seus compromissos financeiros de curto e médio prazo. Esta abordagem, feita na perspetiva do crédito, permite então avaliar a saúde financeira da empresa tendo em conta as perspetivas reais quanto à sua expansão e desenvolvimento, e assumindo o curso normal da sua atividade i.e., pressupondo a não existências de eventos one-offs que possam alterar o curso da mesma. Para isso, calculámos o Free Cash Flow disponível à empresa no final de cada ano, assumindo o cumprimento de todas as responsabilidades financeiras e operacionais passiveis de gerarem cash-out-flows. Através do desenvolvimento de um modelo de avaliação, chegou-se à conclusão que a Empresa tem capacidade para dar resposta às suas responsabilidades até 2019 (último ano projetado) graças aos elevados montantes de liquidez de que dispõe no seu balanço. O estudo realizado permitiu perceber de que forma a empresa compara com a sua concorrência europeia, e de que forma quanto maior o risco, maior yield obtida pelo investimento nas obrigações do grupo. Assim, além do calculo do Free Cash Flow, do cômputo da liquidez e da divida a vencer, analisámos as clausulas contratuais das obrigações da Semapa SGPS e a senioridade da dívida. Todas as análises e projeções foram elaboradas com a informação e conhecimento da empresa disponíveis a 31 de Dezembro de 2014. Palavras-chave:
This project aims to test the capability of a company or economic group, in this case, Semapa SGPS, to comply with its short and medium term financial responsibilities. This approach, on a credit perspective, allows to evaluate the financial health of a company considering the real expectations concerning the company’s expansion and business development, assuming the normal course of activities, which means ignoring possible one-offs events. To do this we have calculated the Free Cash Flow available at the end of each year, considering all cash out flows that will emerge in the future. Through our model we concluded that Semapa SGPS will be capable to respond to its financial responsibilities until 2019 (last year projected) given the huge amount of liquidity available on its Balance Sheet. Our study also compares the Company with its European peers, and concludes on how the riskier profile is reflected in the yield obtained by Semapa’s investors. Besides the calculation of Free Cash Flow, the analysis of the liquidity position and the amortization of debt, we also analyzed the bonds’ covenants and the seniority of debt. All the study and projections were done on the basis and knowledge of the company at 31st December 2014. Key-words: Semapa,
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Hsien-Chin, Chang, and 張賢智. "Free Cash Flow Hypothesis - An Empirical Study of Taiwan Stock Market." Thesis, 1998. http://ndltd.ncl.edu.tw/handle/09927335609738189636.
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Chen, Shih-Ying, and 陳世穎. "Free Cash Flow, Earnings Management and the Performance of Convertible Bond." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/89809141834084902160.
Full textAbstract:
博士國立中正大學
企業管理所
96
According to the theory of the capital structure, enterprises choose the suitable fund-raising tool for their own financial consideration. The most common and fund-raising way is to issue stock or company''s debt. Generally speaking, the stability of holding bond is relatively high, the risk change is also lower than the stock, the company attracts the investors to make the investment and for the important fund-raising tool of company to issue bonds and become gradually. So, besides relevant research of issuing stocks, the changes of stock price remuneration and operation performance after issuing bonds are increasingly important. This paper aims to analyze the change of stock return and operating performance of Taiwan listing companies that issue convertible bonds. I explore to find out whether the companies aggressive management of earnings and find out the reasons of the change of the operating performance that use the free cash flow theory and leverage. Therefore we examine the change of stock return and operating performance of 177 companies issuing convertible bond from 1996~2003. Furthermore, I explore whether the sample company is engaged in earnings management before issuing. Finally, run the rate of returns of the assets (Returns on Assets, ROA) and net difference of interest rate (Profit Margin, PM) for the assessment standard of the operation performance of issue companies. We find that the negative stock returns and the decline of operating performance after convertible bonds issuance. We also find the issue companies have engaged in earnings management. The result supports the free cash flow hypothesis that issuing convertible bonds.
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Ou, Tzu-Yuan, and 歐姿緣. "The Associations among Free Cash Flow, Growth Opportunity, and Earnings Management." Thesis, 2004. http://ndltd.ncl.edu.tw/handle/06624686674214708633.
Full textAbstract:
碩士淡江大學
會計學系碩士班
94
Free cash flow hypothesis points out the agent might cause the agency problems of over-investment and also supposes debt can solve this problem. Based on the debt, this study is extended to explore the debt covenant. The agency problems have generally existed in practice which revealed in previous study. But seldom studies explore the association between the free cash flow hypothesis and earnings management. Therefore, this study is based on free cash flow hypothesis and debt covenant hypothesis to examine the association between these two hypotheses and the discretionary accrual. The study puts free cash flow and growth opportunity into two groups separately, which spread out to four situations to discuss corporate managers’ earnings management phenomenon in different situations and explore the effect of the degree of debt on the managers’ earnings management behavior. Empirical results showed that the managers’ earnings management behavior relates significantly to two variables of free cash flow and growth opportunity in general. The managers exactly use discretionary accruals to manage earnings for self-interest in situation 2(high free cash flow and low growth opportunity), and the discretionary accruals are used more than other situations. The debt can generate the reduction of earnings manipulation caused by managers, so the free cash flow hypothesis is accepted. To other three situations, earnings management commonly exists and the rise of the degree of debt can not reduce managers’ manipulation, so the result accept the debt covenant hypothesis. As the result, this study distinguishing into four situations will help us understand the premises and background that free cash flow hypothesis and debt covenant hypothesis are accepted.
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Huang, Wan-Hsun, and 黃婉薰. "Ananalysis of agency cost and capital structural free cash flow hypothesis." Thesis, 2002. http://ndltd.ncl.edu.tw/handle/89206927649874021074.
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Hsiao, Chen-Kuo, and 蕭振國. "The Association among Governance Structure, Free Cash Flow, and Earnings Management." Thesis, 2015. http://ndltd.ncl.edu.tw/handle/84993909644143225899.
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碩士國立高雄第一科技大學
財務管理研究所
103
This paper discusses the impact of 1996 to 2014 in Taiwan listed companies in the governance structure and free cash flow of relevant variables on earnings management, to research the impact on the earnings management by opportunities for growth, free cash flow, debt ratio, the degree of deviation, shareholding ratio of directors and supervisors, shareholding ratio of managers, the number of internal audit director changes and the number of chief financial officer changes. The results show that growth opportunities will have an impact on discretionary accruals in different industries. Free cash flow, debt ratio, the degree of deviation, shareholding ratio of directors and supervisors, shareholding ratio of managers and the numbers of chief financial officer changes will have an impact on discretionary accruals. The number of internal audit director changes has little effect on the number of discretionary accruals. This paper will also be divided into traditional industries and high-tech industrial industry, to explore different growth rate of industry, governance structure and free cash flow in the relevant variables influence of earnings management. The results show the influence of traditional industries and high-tech industry earnings management variables there are significant differences.
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Chia-Chi, Cheng, and 鄭佳琦. "The Association between Free Cash Flow, Over-investment and Firm's Value." Thesis, 2010. http://ndltd.ncl.edu.tw/handle/79941438202475838594.
Full textAbstract:
碩士中國文化大學
會計學系
98
This study examines the relationship between free cash flow, overinvestment and firm’s value. The sample of the study comprises of public firms data collected from 2005 to 2008. The empirical results suggest that overinvestment is concentrated in firms with free cash flows. In the other words, more free cash flows the firms have, managements will more likely to overinvestment. And overinvestment will reduce firm’s value. Besides, “external monitoring effect” and “internal monitoring effect” extracted by principal component analysis were used as proxies for corporate gover-nance. The empirical results suggest that both “external monitoring effect” and “in-ternal monitoring effect” effectively mitigate the degree of overinvestment.
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Sung, Min-Chuen, and 宋旻錞. "Implication of Free Cash Flow for Private Universities and Colleges' Operation." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/01887518469791087329.
Full textAbstract:
碩士中原大學
會計研究所
96
We refer to the formula founded by Penman (2007) to compute free cash flow of private universities and colleges, and used the regressions to distinguish growth opportunities, monitoring effect, or agency problems which one will be existence in the private universities and colleges. Whether free cash flow can induce growth opportunity and monitoring effect, prior studies got inconsistent conclusions. After controlling the effect of agency problem, we retest the implications of FCF on private universities and colleges’ operation. Under the model, the empirical results show that free cash flow does not have significantly effect on growth opportunities but significantly effect on monitoring effect and agency problems. When we try to link up with growth opportunities, monitoring effect and agency problems, we can sum up as follows: When agency problems are serious, the free cash flow have significantly negative effect on growth opportunities and monitoring effect. On the contrary, when agency problems are light, the free cash flow have positive effect on them. These represent to exist agency problem will bring about negative effect to growth opportunities and monitoring of private universities and colleges.
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Hsieh, Ya-Yu, and 謝雅宇. "R&D Increase, Stock Return and Free Cash Flow Hypothesis." Thesis, 2010. http://ndltd.ncl.edu.tw/handle/90346218494571388523.
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碩士朝陽科技大學
財務金融系碩士班
98
This present study applies revised Jensen’s (1986) Free Cash Flow Hypothesis to investigate whether top managers pursuit their private benefits by using research and development (hereafter R&D) increases, and the effect on abnormal stock returns of firms following increases in R&D. First, from July 1996 through June 2009, the abnormal returns are measured over 156 months (13 years) following the unexpectedly increases in R&D for 936 firms listed on the TSE. Second, We divided R&D samples into 5 portfolios accordng to R&D intensity, which base on the methods developed by Titman,Wei and Xie(2004). Furthermore, we use the three-factor model (Fama and French, 1993) to calculate the expected returns of securities. The empirical results show that R&D increase is a favorable investment activity, but its excess returns are declining after R&D unexpectedly increases. This is consistent with the spirit of Free Cash Flow Hypothesis.
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Li, Cheng-Chien, and 李政謙. "Corporate Governance on Free Cash Flow in the Life Insurance Industry." Thesis, 2013. http://ndltd.ncl.edu.tw/handle/86679465132281194097.
Full textAbstract:
碩士淡江大學
保險學系保險經營碩士班
101
This study applies Jensen’s (1986) Free Cash Flow Hypothesis to investigate the impact of corporate governance on free cash flow in the life insurance industry in Taiwan. Jensen (1986) argues that the increasing of free cash flow represent an incremental cost of the owner-manager conflict, because the existence of free cash flow provides managers with an opportunity to waste cash on unprofitable investments. The sample comprises 21 life insurance companies in Taiwan for 2005 through 2011. We find that larger firms and insurers with higher total risk tend to hold more free cash flow. However, we find that the impact of corporate governance on free cash flow is insignificant. The possible reason is the close relationship between corporate management and family controlling. Most of the directors on the board and supervisors are served by the same family, so the corporate governance system can’t work effectively. Finally, we examine the impact of financial crisis on free cash flow and show that a significant positive relationship between the proportion of independent directors and free cash flow. This implies that independent directors will tend to hold more free cash flow to maintain the liquidity of assets and avoid default risk after financial crisis.
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Hsu, Chih-wei, and 許智維. "Stock Repurchase Announcements: Corporate Investment, Growth Opportunity, and Free Cash Flow." Thesis, 2011. http://ndltd.ncl.edu.tw/handle/00906465353101291287.
Full textAbstract:
碩士逢甲大學
財務金融學所
99
Stock repurchase has been implemented for years and has become an important corporate decision for firm managers. Many studies document that firms announcing share repurchase earn positive abnormal stock returns, and provide two main hypotheses to explain the share repurchase anomaly, i.e., the free cash flow hypothesis (or agency hypothesis) and the signaling hypothesis. Past research uses the amount of investment opportunities (proxied by Tobin’s Q) and free cash flow to measure the magnitude of agency problem. However, they are seldom to further examine firms’ investing behavior following share repurchases. As our knowledge, we the first to comprehensively investigate investing behavior for firms announcing shares repurchases. Particularly, we mainly put our attention on testing the free cash flow hypothesis by examining the post-announcement relation between firms’ investing behavior and market price reactions. Following the prior literature, we use Tobin’s Q and free cash flow to categorize samples into two groups. Samples with low Tobin’s Q and high free cash flow are defined as the group of high likelihoods of over-investment, and firms with high Tobin’s Q and low free cash flow are defined as the group of high likelihoods of under-investment. Within each group, we further partition firms into subsamples in terms of their expected investment and post-announcement real investment activities. For firms within the group of high likelihoods of over-investment, if these firms really increase their investment expenditures following announcements, then they are defined as “overinvesting firms”. Similarly, for firms within the group of high likelihoods of under-investment, they are defined as “underinvesting firms” if these firms experience reductions in their post-announcements investment expenditures. Thus, as indicated by the free cash flow hypothesis, these two types of firms, overinvesting and underinvesting, are having agent problem, and their market performance should relatively underperform firms having less agent problems. In sum, inconsistent with the prediction of the free cash flow hypothesis, we find that the long-run and short-run price reactions are indifferent among firms with or without agent problem measured by overinvestment or underinvestment. We conclude that the free cash flow hypothesis cannot explain the share-repurchase anomaly.
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Huang, Wan-Hsin, and 黃琬歆. "Discounted Free Cash Flow and Valuation of Internet Companies: A Case Study of Yahoo!" Thesis, 2001. http://ndltd.ncl.edu.tw/handle/30856662358606120572.
Full textAbstract:
碩士國立臺灣大學
財務金融學研究所
89
This research employs a revised discounted free cash flow model to value the leading web portal Yahoo! from the inception of its IPO until the end of March 2001. The research divides the whole valuation period into three phases according to the predicted market changes. The first phase is from April 12th 1996 to the second quarter of 1998. Using the revised discounted free cash flow model, a valuation close to the real market value can be assessed. The second phase (from the third quarter of 1998 to the fourth quarter of 1999) is the bubble period, and thus the revenue from electronic commerce, content charges and CD sales are added onto the model. In addition, the uncertainty of the future economy is incorporated into the situational analysis in order to value the flexibility value. The third phase is from the burst of the bubble in March 2000 when the investors have showed reservation towards the future of the Internet. Here the valuation method is same as the first phrase with the exception that the research costs are considered as expenses. The result indicates that although the revenue estimates based on the performance of the historical revenue cannot match the real revenue; however, it has a more objective prediction and evaluation result comparing to subjective prediction. In addition, the fundamental value in the second phase (bubble period) manifests the characteristics of a leading indicator. The research also found out that the records of insiders trading and performing stock options provide a useful reference value to the investors. Despite the industry type, market value will eventually match the fundamental value calculated from discounted cash flow method. The fundamental value in the first quarter of 2001 is 11.7 billion US dollars while the market value is 9 billion US dollars. (If the research costs are capitalized, the basic value would be 13.2 billion US dollars).