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Today we’ll do a simple run through of a valuation method used to estimate the attractiveness of SKYCITY Entertainment Group Limited () as an investment opportunity by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. Don’t get put off by the jargon, the math behind it is actually quite straightforward.

Remember though, that there are many ways to estimate a company’s value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of the .

The calculation

We’re using the 2-stage growth model, which simply means we take in account two stages of company’s growth. In the initial

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