Finance valuation of En+ group
For discounted cash flow approach
What model you would like to use stable growth, two periods or three period growths???
Think of the discount rate you would like to use to compute PV of cash flow. Different rate for different stage of growth? Or the same???
• What you would like to value 1) entire firm (FCFF) or only equity part (FCFE or Dividend)
• Use WACC for firm valuation, required rate of return for equity for equity valuation
For equity valuation
How to estimate the growth rate of dividend and growth rate of FCFE (ratios using historical average, industry average)
What is your assumption about financing of capex and change in working capital??
EBITDA (both equity of firm)multiple is one of the most commonly used valuation metrics, as EBITDA is commonly used as a proxy for cash flow available to the firm.
When a company has negative EBITDA, the EBITDA and EBIT multiples will not be material. In such cases, Sales multiple may be the most appropriate multiple to use.
When depreciation and amortization expenses are small, as in the case of a non-capital-intensive company such as a consulting firm, EBIT and EBITDA will be similar.
For the sake of consistency (because you want to compare both DCF and relative valuation results), if you value FCFF, use the multiples that estimate the value of the firm, if you estimate the value of equity FCFE, use the equity multiples.
