Valuation: Facebook case study

Corporate Valuation is a topic that impacts different areas across finance field. In fact, when discussions about companies are made, one of the most important issues has to do with the value of that company and how that value is created. The aim of this thesis is to perform an assessment on the mar...

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Detalhes bibliográficos
Autor principal: Mousinho, Diogo Afonso da Costa (author)
Formato: masterThesis
Idioma:eng
Publicado em: 2016
Assuntos:
Texto completo:http://hdl.handle.net/10071/11516
País:Portugal
Oai:oai:repositorio.iscte-iul.pt:10071/11516
Descrição
Resumo:Corporate Valuation is a topic that impacts different areas across finance field. In fact, when discussions about companies are made, one of the most important issues has to do with the value of that company and how that value is created. The aim of this thesis is to perform an assessment on the market value of Facebook, as of 31-12-2014, and consequently its implied value per share. In order to gauge the company value two of the most widespread methods in the field of valuation were used: Discounted Cash Flow and Multiples valuation. DCF valuation was calculated through both Firm and Equity’s perspectives which resulted in an implied value per share of $81.09 and $81.00, respectively. For Multiples valuation it was selected a group of peers and based on those it was calculated Facebook’s value through EV/EBITDA and P/E multiples, resulting in a value per share of $65.48 and $69.08. Hence, the expected price per share of Facebook ranges from $65.46 to $81.09. That said, the recommendation is to Buy (or Hold) Facebook stocks.