Valuation Essay

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Banyan Tree Holdings Hotels and Resorts Equity Securities Valuation Report Table of Contents The Company: Banyan Tree Holdings Corporate Overview 1 Industrial Analysis 3 SWOT Analysis 9 Financial Ratio Analysis 17 Competitive Advantage 19 Banyan Tree Holdings: DCF Valuation Choice of DCF Valaution 20 Estimating Cost of Equity 23 Estimating Cost of Debt 28 Adjustment to Financial Statements 29 FCFE Valuation 37 Decomposition of Estimated Intrinsic Value 46 Sensitivity Analysis of Key Assumptions 47 Banyan Tree Holdings: Relative Valuation PE Ratio Valuation 50 Banyan Tree Holdings: Option Pricing Model Option Pricing Model 59 Acquisition and Value Enhancement Strategies Value of Control 60 Potential Merger Partners 61 Conclusion Final Value Estimate and Recommendations 63 References 65 Appendix A Adjustments to Financial Statements 66 Appendix B Free Cash Flow to Equity Computation 70 Appendix C Price-to-Earnings Multiple 71 Appendix D Application of PE Multiple 74 Appendix E Market Regression 78 The Company: Banyan Tree Holdings Limited Corporate Overview Banyan Tree Holdings Limited is a leading, international hospitality brand that manages and develops premium resorts, hotels and spas around the world. They are currently listed on the Singapore Exchange. The Group started out from a single boutique resort in Phuket in 1994 and had since grown into a multi-business operator globally. It currently manages and/or has ownership interests in over 23 resorts and hotels, in excess of 70 spas and retail galleries, together with 3 golf courses. The firm is best known for its signature Banyan Tree and Angsana brands. Banyan Tree’s

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