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Title: Applying the Free Cash Flow to Equity Valuation Model in Coca Cola Hellenic
Other Titles: Εφαρμογή του Μοντέλου Αποτίμησης των Ελεύθερων Ταμειακών Ροών στα Ίδια Κεφάλαια της Coca Cola 3Ε
Authors: Dimitriou, Maria
Type: Conference Paper
Subjects: FRASCATI::Social sciences
FRASCATI::Social sciences
Issue Date: Aug-2012
Publisher: University of Macedonia, Department of Accounting and Finance
Volume: 4
Issue: 1
First Page: 22
Last Page: 32
Volume Title: Proceedings of the 4th International Conference on Accounting and Finance. Corporate Finance
Abstract: In this paper, I present the process of applying the Free Cash Flow to Equity valuation model in Coca -Cola Hellenic Bottling Company S.A. in order to determine the value of its stock. The value of the firm’s stock is calculated by forecasting Free Cash Flow to Equity and discounting this cash flow back to the present at the appropriate required cost of equity. In addition to computing free cash flow to equity, this paper will show you how to calculate the expected growth rate pattern and the cost of equity. To achieve this, the Free Cash Flow to Equity was calculated in the period of 2009-2011 based on a sum-of-the-parts approach that values the three main geographic businesses of the company separately: Western Europe and both Eastern Europe and West Africa. Additionally, an anticipated growth rate was used to estimate the future value of Free Cash Flow to Equity in a three years period. Also, the present value of this flow in the appropriate growth pattern was forecast regarding yield discount rate which was demanded the stock of Coca-Cola Hellenic from the year 2012 to 2014. Finally, the real value of Coca-Cola Hellenic will be calculated using the sum of 3 anticipated Free Cash Flow to Equity plus the end value of the company at t=3. Dividing the total value of equity by the number of outstanding shares gives the value of its stock.
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