Valuation of Selected Publicly Traded Company

Abstract

The goal of the thesis is to make a valuation of LVMH Group via DCF at 1.1.2021. The valuation method used in this thesis is the two-stage discounted cash flow method. Part one is the introduction of the whole thesis. The second part is the theory part. All the formulas and Excel tools needed for the valuation process will be presented. This part will introduce the methodology of the valuation process. The third part is the introduction of the selected company. We will give a brief history of its development. Next, we will do a SWOT analysis to map out the market environment. Next is the financial analysis. The fourth part will introduce the valuation process, which is the core of this thesis. Data for the last 15 years from 2006 to 2020 will be used. The first process will estimate sales revenue. The second step is to make a financial plan, which includes the plan of EBIT, plan of depreciation, plan of net working capital, plan of investment, and plan of financing. After estimating these plans, we can get estimates of free cash flow to the firm (FCFF) over the next five years. The third procedure is the calculation of the cost of equity, the cost of debt, and the cost of capital, using the weighted average cost of capital. The last step is to calculate the value of the company using the DCF method.