Scholarly Research Paper from the year 2011 in the subject Business
economics - Operations Research, grade: 1,3, University of applied
sciences, Dusseldorf, course: Business economics - Investment and
Finance, language: English, abstract: The main scope of this
assignment is the valuation of the Lanxess AG a German based
chemistry corporation, with about 14,400 employees and annual sales
of about 5.05 billion EUR. The core activities of Lanxess AG are
specialty chemicals, polymers and intermediates, including rubber
chemicals, material protection products, ion exchange resins,
inorganic pigments, semi-crystalline products and fine chemicals.
The authors have described the two enterprise evaluation methods -
the DCF-approach and the multiplier method - with its advantages
and disadvantages in practical application. For the corporate
evaluation of Lanxess AG, the authors based the calculation on
those two most common global evaluation approaches. The DCF method
estimates the value of a company by discounting expected cash flows
in the future or determined period of time, similar to the value of
an investment. For the assessment of the company value, the entity
and equity DCF method with an assumed constant growth rate of 3
percent has been applied. For the validation of the calculated DCF
corporate values the multiplier method was conducted as second
evaluation method based on EBIT-, EBITDA-, Price-Cash Flow-,
Price-Earnings, and revenue ratios. For the necessary peer-group,
the authors selected six appropriate global competitors: Arkema,
BASF, Clariant, DSM, Huntsman and Rhodia. The different evaluation
methods lead to various enterprise values of Lanxess AG with a
bandwidth of evaluated results between 1.50 billion EUR and the
value of 17.98 billion EUR. The DCF-approach results in values from
3.81 billion EUR to 5.81 billion EUR. For the multiplier method
there have been calculated enterprise values between 1.5 billion
EUR and 17.98 billion EUR. The overall median
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