Per capita beer ingestion of Peru assumed to treble over 10 twelvemonth clip and fiting planetary criterions of 72 liters by terminal twelvemonth.

Income snap ( 0. 498 ) incorporated into theoretical account as a lever of GDP Growth ( placeholder for beer growing potency )
This is multiplied with false addition of 3x in per capita beer consumption to get at a macro economic placeholder of 7. 49 %
We subtract the given value with CPI Index ( rising prices metric ) factorization in false 5 % monetary value growing in beer * Negetive Price Elasticity ( -1. 676 ) geting at net macro economic proxy= 6. 89 %

CASH FLOW GROWTH RATE-II
Cash flow growing taken as map of both fast growth macro economic factors + company specific public presentation

Company Specific Growth Rate
Historic EBITDA growing rate given in instance =52. 4 % ( 50. 4 manganese USD ( 02 ) 31. 69 manganese USD ( 01 ) The rate is normalized and reduced bit by bit with power of 5 % lessening to get at terminal value growing rate of 2. 39 %

( To account for lifting estimated competition locally and South American Brewery industry and unfavorable govt policy )
Terminal Value Growth Rate = Function of long term Peru growing rate* Industry Beta Cash flow growing rate arrived for first 10 old ages
6. 89 % ( Macro-economic placeholder ) + 21. 6 % ( Company specific gross growing ) The arrived growing rate is accounted for a rising prices of 2. 5 % assumed. Concluding hard currency flow growing rate used in DCF Model= 25. 5 %

DISCOUNTED CASH FLOW MODEL
( All figures in USD Mln )

Question 1 ( B )
Can you believe of an alternate manner to value Backus based on the information of the instance?
Explain how you would make it. what the value would be and how it would differ from the DCF consequences.

Relative VALUATION -I
( Data Source-Exhibit 16 ) – All figures in USD Mln
Approach-1 & gt ; Price/Sales Method
•

First we get the comparable South
American marks and calculate the
mean P/Sales multiple. ( 2. 12 )

•

We multiply mean P/S multiple
with Company Gross saless ( 137. 19 ) to
arrive at market determined Firm
Value ( 290. 82 USD Mln )

•

Dividing by figure of unfastened category Angstrom
portions ( 87. 2 mln ) . we eventually arrive
at a Share monetary value of 3. 35 USD

Relative VALUATION-II
( Data Source-Exhibit 16 ) All figures in USD Mln
Approach-2 & gt ; EV/EBITDA Method
• First we get the comparable South
American marks and calculate the
mean EV/Ebitda multiple. ( 11. 8 )
•

We multiply mean EV/EBITDA
multiple with Company EBITDA
( 50. 47 ) to get at market
determined Firm Value ( 596. 81
USD Mln )

•

Dividing by figure of unfastened category Angstrom
portions ( 87. 2 mln ) . we eventually arrive
at a Share monetary value of 6. 84 USD

RELATIVE VALUATION- A RECAP
?

We find our authoritative RV attack utilizing ( EV/EBITDA ) & A ; ( P/S ) Method returning a steadfast value less than that of DCF Method.
Firm VALUE