RT Journal Article
SR Electronic
T1 Discounted Cash Flow Method for Valuing International Chemical Distributors
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 52
OP 69
DO 10.3905/jpe.2018.22.1.052
VO 22
IS 1
A1 Tay Kin Bee
YR 2018
UL https://pm-research.com/content/22/1/52.abstract
AB Do special considerations apply to valuation in the case of large global chemical distributors? This study seeks to identify whether Income-based Discounted Cash Flow method based on projected future income would be suitable to value international chemical distributors. Two- and Three-stage Discounted Cash Flow models will be used. The expected companies’ enterprise and equity value are compared with the existing companies’ valuations. A base, bear and bull case scenario will be set up to establish the range of the company’s value for comparison with the existing valuation. This study adopts a single multiple-case study approach where actual financial data from three of the world’s largest chemical distributors were used to establish the existing companies’ valuation to demonstrate the validity and applicability of the Discounted Cash Flow method for sensitivity analysis.TOPICS: Private equity, other real assets, statistical methods, fundamental equity analysis