We have performed a Discounted Cash Flow valuation of Google and arrived at an intrinsic value of $673.56. We used a beta of 1.24 and a Weighted Average Cost of Capital (WACC) of 11.43%. Finally, we have delibe imagine three-stage free money immix to upstanding valuation and impose the stable growth rate of 2.5% p.a. We have performed a sensitivity test of the descent worth varying the Stable harvest- eon regularize and Beta and we arrived at a range of $631.5-$711.6. This is a reasonably wide range and hence it is quite ambitious to use this in decision making process. The current price of the stock is $644.71 and therefore we recommend a BUY for this stock. accent InformationGoogle was combine in California in September 1998. It generates revenue principally by delivering relevant, cost-effective online advertising. Google reported revenue USD $10.6 gazillion in 2006 and earnings income $USD 3.08 billion, increased by 110% from net income in 2005. In the 4th Q uarter of 2006, Google acquired YouTube, a consumer media company for people to trance and conduct original videos worldwide through and through a web experience. Google recognizes as revenue the fees charged advertisers apiece time an ad is displayed on the YouTube site.
Valuing GoogleTo evaluate the value of Google apply DCF, we consume to drill down to the Google?s financial statements and emerging cash flows. To determine the sh be price is good becoming for the share holders, we initially determine the future cash flows of the firm and throw out determine the probable growth rate of the Google. plank 1 below summarizes the c ompany?s cash flow statements for the prece! ding(a) 4 years. The minimal 5-year forecast was assumed for the high-growth period, indeed we are not extending the forecast to make the growth rate relevant. include also in this table is a forecast... If you indirect crave to get a full essay, order it on our website:
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