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Page Industries Limited: What is the Intrinsic Value?
內容大綱
In October 2022, Mr. Kumar was looking at adding Page Industries to his equity portfolio. He approached Mr. Paibir of P3 Investment Solutions in Goa, India, for advice. Mr. Kumar wanted to know the fair value of Page Industries’ equity shares. An equity analyst was tasked with analyzing Page Industries and suggesting a price level for long-term investment. This exercise addresses several key issues in estimating a firm’s fair value that makes it unique. First, a comparative analysis of Page and its peers on key financial factors is used. The next issue is modelling for future growth to estimate revenue, profits, cash flows, and computation of intrinsic value. Finally, the exercise addresses the challenges in estimating fair multiples to value a firm using the relative valuation method.
學習目標
This exercise has a difficulty level appropriate for graduate courses, specifically, the second year Master of Business Administration and Master of Science in finance. The exercise is designed to be taught in one or two lecture hours including 30-40 minutes of presentation of students’ work; and would require about four to five hours of student preparation. By working through the exercise and assignment questions, students will have the opportunity to do the following:<br><br><ul><li>Understand the past performance of Page Industries.</li><li>Model the growth factors to forecast key financial numbers of a firm.</li><li>Estimate the intrinsic value using different valuation methods.</li><li>Examine the reasonableness of the assumptions made in the valuation model.</li></ul>