Value of the Company

Running Head : Z K COMPANY

Valuation of Z K Company

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There are several methods used to calculate the value of a company . For instance , we can use the corporate valuation model or the dividend growth model . The dividend growth model involves the discounting of dividends and their growth . To be able to apply the method , current divided , growth of the dividend and the rate of return of the dividend are

required

Value Current dividend (multiply (1 Dividend growth (Rate of return - Dividend growth

In the case of the corporate valuation model method , the total value of the company is defined as the value of non-operating assets plus the value of operations plus the value of growth options (Koller , Goedhart and Wessels , 2005

Using Z K Company as an example , the two methods of valuing a company can be demonstrated as follows

Dividend growth model

Current dividend 30 , dividend growth 0 .1 , rate of dividend growth 0 .8

Value of Z K 30 (1 0 .5 (0 .8- 0 .5 150 .00 million

Corporate valuation model

Non-operating assets 85 .00 million , value of operations 35 .00 million 30 .00 million

Value of Z K 150 .00 million

The total shares capital thousand , the number of shares 1500000 thousand

Price per share 10 , the actual price of this company is 9 .85 . There is a difference between the calculated and the actual...