Date: 2010-06-03
Subject: Bachelor Thesis in Business Administration
University: Mälardalen University, Vasteras
Institute: School of Sustainable Development of Society and Technology
Title: Business valuation with Fundamental analysis
Authors: Sebastian Järvinen and Slavisa Stupic
Tutor: Riitta Lehtisalo
Examiner: Cecilia Lindh
Questions: What valuation methods and models are most appropriate for the valuation of Eolus Vind AB?
Is Eolus share over- or undervalued?
What influence do the deviations in the prognosis have against the forecasted valuation of Eolus?
Purpose: The purpose of this study is to perform a Business valuation of Eolus and determine it its share is over- or undervalued. The study will also deal with the uncertainty in the valuation.
Method: The study has a deductive approach, which says that the starting point lies in a existing theory. Furthermore, qualitative and quantitative methods are used to obtain a deeper understanding of how valuation methods and models are used in the practice, which t hen forms the basis of a valuation of Eolus.
Conclusion: The most appropriate method for a valuation of Eolus is a DCF analysis, where the first step is to do a fundamental analysis, which involves a study of the company, its industry and the market to form a basis for the forecasts, and assumptions that are required in a DCF analysis. A relative valuation is a preferable combination with the DCF analysis. According to our projections, assumptions and estimates we believe that Eolus share is undervalued in relation to today’s share price.
Keywords: Business Valuation, Fundamental analysis, Eolus Vind AB, DCF, CAPM, WACC, relative valuation