【正文】 Terminal ValueT=FCFT+1/(WACCg)FCF1 FCF2 … FCFT1 FCFT T1FCF = Free cash flowWACC = Weighted Average Cost of CapitalTV = Terminal Value (at time T) = FCFT+1/(WACC – g), where g is the longterm growth rate in salesT = Length of the forecast horizon (typically, 7 to 10 years)CFAII_SS18:toor Asset turnover ratios(affectJohnitthatthe WACC (risk)CFAII_SS18:2023The Return Spread? ReturnWeightedWACC,theROICorCapitalCFAII_SS18:MarginonAdded)? DCFInvestment)? TRS2023Value Driver Analysis? EconomicCapital? Value drivers:167。 Growth:2023ROIC TreeROICEBIT/InvestedAssets/SalesCOGS/SalesDepreciation/SalesSGAWei,thanGillette’spaniesofasalesawithoftalentvalueoffersannouncements.? HowbulkOptions 64 byskepticalaround167。diligence? Overbidding:2023Value Creation or EnhancementSummaryCFAII_SS18:existingliquidate167。taxinvestments167。 Tradeoffincreasegood:John(N)167。legalofleverage167。Options 68 by(g)(valueacquisition167。 ReachriskValue, Value, and ValueCFAII_SS18:efficiency?SixROICcapitalriskWei,enforcement?Culture?Corporate(M/B)?MarketWei,valuation? SpinnegativeJohnorannouncementfirms:JohnvaluationCFAII_SS18:2023RD and Advertisements? RDomission:announcements? DividendeffectCFAII_SS18:zerohaveOptions 72 bytodevelopment?LawOptions 71 bybyopportunity?Reachifimprovetocorporate Mergeroperatingfinancing ReducetheandhighgoodCFAII_SS18:growthsflowgrowthon Reducedivest,flowsJohnproblems:slump167。marketroughlygetaroundand2023Evidence on Value Creation in MA Transactions? TheandatoitengineeringmayTime’s(mergerandmoreOptions 62 byCapital/SalesNetJohn?JohnReturn(Economic(P/E)? ROICper?value.? Economicdestroys=ROIC(ROIC)John Growth167。ofinvestedonly2023Fundamental Drivers of a Company’s ValueValue DriversCFAII_SS18:capital(affectsFCF)167。of(both availableremainingcash(FCF)167。DiscountedCapitalYear 1 Year 2 Year 3 Year 4 Year 5CFAII_SS18:Wei,Wei,andrestructuringpaniesfinancial manipulations.aopportunitiespany TakingWei,Investor(ROIC)EP (Economic profit ) = Invested capital (ROIC – Opportunity cost of capital)? TieincorporateandbusinessWei,operatingindicatesbreakdownOptions 44 by2023Financial Engineering? Minimizing Weighted Average Cost of Capital Does Not Maximize Value of FirmsoldDirect Sales? Taxableaccounting)usedfreebeissubsidizationbusinesses:inadvantage: Competitive advantageDecision:167。twosales167。goodstheinventoryPerception Gap$100?OvervaluedValue createdThroughRestructuringCFAII_SS18:improvement$1,200Market Inefficiency$50Value created$800Growth opportunities + Financial Engineering$150?NotandValue$1,000 MaximumbusinessValue createdThroughRestructuringCFAII_SS18:structure?DividendusingmanagementvalueDesignScan(WACC,businessefficiency)167。toworstWei, Communicating with investorsonmanaging Divestures167。benefit。restructuringiscreateofcostInvestreturns,2023Restructuring CompaniesGeneralCFAII_SS18:accidental.167。follow:167。credibilitycreate(202307)? Enronbrand2023Case studies (HBR)When pany values backfireassetsits1983achievinggreater value for shareholders)implicit? AtofsLloydsWei,workers,createto2023ShareholderOriented Firms Benefit All (con’t)? Companiesvirtuous cycleOnyears., Investedto167。andleadpershareholderOptions 28 bymakesGrowthof2023What is the Value of a Firm?? Firmis,greaterthatWei,value creation.do GoodandperformanceWei,Options 20 byYoungCFAII_SS18:Wei,Theindependentboardandperformance.strategicassumptionsonandcandorworkgreattunneling)CFAII_SS18:shareholders.Wei,to Shareholdersshareholders,andWei,managers39。isthe Firmsof Disclosurecostimproves(2023) benefitgovernance:167。forMcKinseyOptions 13 bycapabledelegate? PassIntegrity)? Cannotdestroyingbecrossholding)167。Wei,auditing167。SECinvestors’were(stock Enron,Systems,Xerox,Wei, RD167。margin167。informationYuMerck)? OperatingWei,matureof$20capital$20,2channels,entry:moneyHondifferential。profitofriskrisk(WACC):orvaluecostthe IncreasenewreturnofWei,NOPLAT/ICg/ROICROICROICcapitalgaveragetaxesEBITiswhereofdiversified?CorecreateWei,BenQ.executives,StockexecutiveKongforalsofinancialmodelSengtheHong Kong Economic Journal,WeiTaiwaneseonisconsiderableinareas.aAsianinManagement,2023ofMarketstheJuneJanuaryActingwasSchoolJohn1989heoneUniversity1984ofIllinois,hisOptions 1 by2023Profile of Prof. . John Wei? Prof.Finance1984.an1988.asmovedan1992.beenanfulltheAugustWeitheAustincurrentlyresearchderivativesmarkets,highofintheofstockmarket.regularnewspaperProf.developandcalledconsultancya? Prof.HKUST,provincialDaimler/Chrysler,Johnvaluation?ComparableWhatOptions 4 bywithbefore=rateonrateformula? How Increaseinvestedwhen(g),petitive(WACC)CFAII_SS18:profitthetheriskcapitalManagersOptions 7 byortheTaiwanmanagement)? Low(2)protection? Example:15%。everyinvestment==willJohnrisk:ofLeverageandUMC)167。 ReserveJohnaccountingWorldFreddieearnings,involved Wholeconfidence? Remedies167。.boardscontrolledof Entrenchmentofprofessionaltomore2023Why is corporate governance important?? Ashowsfirms.? Thecost of capitalandin25%capitaltheisCGcapital? Simonswithintegrityofand? Preventing potential exploitationinsiders DirectorsfirmsshareholdersbetweenAsianWei,Septemberclimatemembe