BUSINESS VALUATION

KJPP YANUAR BEY & REKAN

Introduction to Valuation :Introduction to Valuation :Discount FactorDiscount Factor

IVAN TEGUH KHRISTIAN

GoalsMemaparkan overview tentang discount

factorTeam Y&R dapat melakukan kalkulasi

discount factor

Nilai disusun berdasarkan fungsi dari pendapatan dimasa mendatang yang “ditarik” ke masa kini dengan suatu harapan imbal hasil tertentu

Cost of Capital = Expected Return

“tingkat pendapatan yang diharapkan oleh pasar untuk mendapatkan dana

untuk membiayai suatu investasi”-opportunity cost-

IVAN TEGUH KHRISTIANSource :

Firm withexcess cash

Shareholder’s Terminal

Value

Pay cash dividend

Shareholder invests in financial

asset

A firm with excess cash can either pay a dividend or make a capital investment

Invest in project

Because stockholders can reinvest the dividend in risky financial assets, the expected return on a capital-budgeting project should be at least as great as the expected return on a financial asset of comparable risk.

IVAN TEGUH KHRISTIANSource : stern-edu

FORMULA


CAPM

Content

The capital asset pricing model:

E(R) = Rf + B(Rm-Rf)

where:E(R) = Expected returnRf = risk free rate of returnB = betaRm = market return

IVAN TEGUH KHRISTIANSource : DIOLAH

Risk Free For an investment to be riskfree, i.e., to have an

actual return be equal to the expected return, there must be: No default risk; this usually means a government-issued

security; but, not all governments are default free. No uncertainty about reinvestment rates.

Practice : use Government Bond Yield

Source : http://www.investing.com/rates-bonds/indonesia-30-year-bond-yield-historical-data

IVAN TEGUH KHRISTIANSource : P.V. Viswanath - DIOLAH

Risk Free Find….


Risk Free Theoretically, this means using different riskfree rates for each

cash flow - the 1 year zero coupon rate for the cash flow in year 1, the 2-year zero coupon rate for the cash flow in year 2 ...

Practically, if there is substantial uncertainty about expected cash flows, it is enough to use a single riskfree rate for all flows

“USE SINGLE RISK FREE RATE FOR ALL FLOWS”


Risk Premium


The risk premium is the premium that investors demand for investing in an average risk investment, relative to the riskfree rate.

As a general proposition, this premium should be• greater than zero• increase with the risk aversion of the investors in that market• increase with the riskiness of the “average” risk investment

Source : P.V. Viswanath - DIOLAH

Risk Premium FIND…. Theory : Survey investors on their desired risk premiums and use

the average premium from these surveys. Surveying in practice is difficult because there is no way to

ensure that the numbers that participants provide are the ones they use in their own decision making.

Assume that the actual premium delivered over long time periods is equal to the expected premium - i.e., use historical data

Estimate the implied premium in today’s asset prices.

• Practice: Gunakan Damodaran


Beta“A coefficient measuring a stock’s relative volatility” or in other word “Beta measures a stock’s sensitivity to overall market movements”

Source : UBS Warburg Dictionary of Finance and Investment Terms IVAN TEGUH KHRISTIAN

“is a number describing the correlated volatility of an asset in relation to the volatility of the benchmark that said

asset to be compared to.”

It measures the part of the asset’s statical variance that cannot

be removed by diversification.

Beta, read….Stock ANTAM has a beta of 2 The IHSG index increases in value by 10%

The price of ANTAM is expected to increase 20% over the same time period

Stock ANTAM has a beta of -2 The IHSG index increases in value by 10%

The price of ANTAM is expected to Decrease 20%

over the same time periodIVAN TEGUH KHRISTIANSource : ……..

Beta is a measure of volatility

Volatility is associated with risk

If beta is a measure of risk, then investors who hold stocks with higher betas should expect a higher return for taking on that risk

Beta, read….


Beta, read….Theoriticaly : use regressionPractice : Use Thomson Reuters + How to

calculate leverage / unleverage


WACCWeighted average cost of capital:

WACC = (D/V)*Rd*(1-T) + (E/V)*Re

where:D = market value of firm’s debtRd = return on debt securitiesT = tax rateE = market value of firm’s equity securitiesRe = return on equity securities (from CAPM)

V = total value of firm’s securities (D + V)


Determining Cost of DebtMethod 1: Ask an investment banker what

coupon rate would be on new debt.Method 2: Find bond rating for the company

and use yield on similarly rated bonds.Method 3: Find yield on the company’s

existing debt.

Common Practice :Use Bank Indonesia - Seki 1.26 (IDR), Seki

1.27 (USD)


Cost of Debt – find…


Cost of Debt – find…

Dalam Penilaian Bisnis, terdapat manfaat pajak (Tax Shield), sehingga Cost Of Debt (1-Tax)Dalam Penilaian Assset, tidak terdapat, karenya objek pajaknya adalah terletak pada pedapatan bukan pada aset perusahaan


Capital StructurePenilai bisnis (VIII C3):Dalam hal penilaian dilakukan atas obyek penilaian yang merupakan kepemilikan Minoritas, maka Penilai Usaha dapat menggunakan struktur modal berdasarkan nilai bukuDalam hal penilaian dilakukan atas obyek penilaian yang merupakan kepemilikan Mayoritas. maka Penilai Usaha wajib menggunakan struktur modal berdasarkan pasar

Penilai AsetKomposisi 65-35 seusai yang berlaku di pasar –common practice


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BUSINESS VALUATION

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