For GAMESTOP (GME)
please include both the discounted cash flow model and The Relative Valuation Models or method of Comparable in an excel table as well as answering the full question Thank you.
Corporate Valuation – Introduction
1. This component shall be a prospective (forward-looking) analysis in nature. The
task may involve replicating the procedure used in Example 9.7 of the text (ch. 9).
2. Using the principles discussed in the course, obtain discounted present value of
forecasted free cash flows for the next five years (ideally!) and of the terminal
value to arrive at an estimate or estimates of the intrinsic value for the company’s
stock. This step may require a reformulation of the financial statements.
3. For this project, an estimate of the growth rate(s) for the firm’s sales/revenues or
earnings can be based on the team’s analysis of the firm’s business, strategy and
financial statements, macroeconomic environment. Also, the ratios reflecting how
certain items on the income statement and the balance sheet vary proportionally to
sales may be used.
4. Spell out and justify the assumptions made to generate forecasts and projections.
5. The principal approaches to be used for this project to estimate the firm’s intrinsic
value are:
?The DISCOUNTED CASH FLOW (DCF) Model, which is part of
fundamental analysis.
?The Relative Valuation Models or method of Comparable, which may take
the form of multiples and comparable firms. This approach can be used to
complement the DCF model, as a check.
