英國dissertation：第一太平戴維斯公司的評估及相關論述

The valuation of Savills
第一太平戴維斯的評估

Introduction
介紹

In this chapter will use the previous chapters’ information to make a forecast balance sheet to Savills Company. Then use DDM, DCF and EVA model to calculate the anticipated share price.
在這一章中，將做出預測第一太平戴維斯公司的資產負債表。然后使用DDM，DCF和EVA模型計算預期股價。

In the left side of 2009, data are from annual report of Savills 2009, sales and ROE are anticipated by previous information from historical data.
In the anticipation of market recovery, this report assumed after year 2009 Savills will have 10% increase rate of sales.
Because Equity Pct Total Capital is 95.36% (see chapter 5.10), so this report used ROE for making forecasting. From the past years data, ROE shows a stable figure around 8% despite of changes in conditions (average number in the past 20 years).56 (see appendix)

Calculation of cost of equity
權益成本的計算

This report is using capital asst pricing model (CAPM) to calculate the required return of equity (re).
Required return of equity=risk free rate + β*risk premium
This formula developed by Jack Treynor, William Sharpe, John Lintner and Jan Mossin.

Determination of risk free rate (rf)
無風險利率（RF）的測定
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In this report, the risk free rate (rf) is used to calculate required return of equity and WACC, which are used as discount factors for infinity time period. Since Savills is a UK company, so this report choose UK Treasury Bill rate as risk free rate which is selected as 0.5%
在這份報告中，無風險利率（RF）的股權，加權平均資本成本作為折現因子為無窮大的時間段來計算所需的回報。由于第一太平戴維斯是一家英國公司，因此本報告選擇英國國庫券息率作為無風險利率為0.5％。

Determination of market return rate (rm)
市場收益率的測定

Rm represents a market risk, in this report, using FT100 index which can reflect a fair UK market return

Determination of risk premium
風險溢價的測定

Risk premium defined as expected rate of return above the risk free rate.58 Formula is: Risk premium=rm - rf
In this report, risk premium used by average annual risk premium within 25 years, which is 7.53% from 1985 to 2009(see appendix).

Determination of β
β is the coefficient covariance of Savills return rate (re) and market return rate (rm). In this part, β is selected as 0.66 which is from 14 August 2010.59#p#分頁標題#e#

Result of required return of equity (re)
After the calculation which used the formula re=rf + β*risk premium
Re equals 5.4%
Determination of cost of debt
The cost of debt figure is from the annual report of Savills the calculation method used the weighted average cost of debt, and the final result is 4.26%

Determination of tax rate
The tax rate 28% is selected from annual report of Savills 2009; this is a consolidated tax from international business.
Determination of weighted rate of debt and equity
The weighted rate used the market value of equity and debt.
Market value of equity =share number * share price
131791925*314.10GBp60=413958436GBP
The market value of debt is complex to chase, so in this report, only used the book value of debt £253.5m instead.
So the weight rate of debt and equity is 38%, 62% respectively.
Result of weighted average cost of capital (WACC) is 4.5%