06.09.2019
 Essay

Msc in Economics and Business Administration Grasp Thesis MSc in Financial

Valuation of Pfizer Inc. and research of new medicine development project using a genuine option way.

Author: Valdis Cvetkovs

Manager: Peter Lochte Jorgensen

April 2011 Aarhus

Abstract

This kind of thesis investigates the world's largest pharmaceutic company Pfizer Inc. via strategic and financial standpoint in order to decide companies' reasonable market value. The external evaluation researches industry and global economic situation within the valuation date as well as says the future tendencies. Bases for valuation consist of discounted earnings valuation. And also the real choice valuation method is used to determine the value of fresh medicine at the beginning of its development process. The results are when compared to usual discounted cash flow value method and offer an answer in the event that development of fresh medicine shall or shall not be proceeded with.

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Acknowledgment

We express honest acknowledgement to my supervisor, Peter Lochte Jorgensen, pertaining to his help and support during the thesis writing process. I i am also thankful to workers at Aarhus Business University during the whole study period. I would like to thank my children and close friends for assisting and encouraging myself to go after with this kind of degree. Special thanks for support, inspiration and being next to through this two year master's program besides my family to Jan Bernatzky, Mihail Kuklin and Boriss Kuzmin.

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Table of contents:

1 ) Introduction.................................................................................................................. 6th 1 . 1 ) 1 . installment payments on your 1 . three or more. 1 . 4. Methodology..................................................................................................... 6th Problem Affirmation............................................................................................. 7 Short introduction to Pfizer................................................................................ 7 Limitations:........................................................................................................ 8

2 . Analysis of companies' historic performance:.......................................................... being unfaithful 2 . 1 . 2 . installment payments on your 2 . a few. 2 . four. 2 . five. 2 . 6. 2 . several. 3. Accounting standards:....................................................................................... being unfaithful Reformulation of financial statements:.............................................................. 9 Capitalized bills:.............................................................................. 9 Computation of spent capital:........................................................................ 11 Net functioning profit fewer adjusted taxation........................................................... 12 Income growth:.............................................................................................. 13 Return upon invested capital:.............................................................................. 14 The Free Cash Flow:........................................................................................ 16

installment payments on your 2 . 1 .

Estimating Measured average cost of capital......................................................... 18 3. 1 . 3. installment payments on your 3. 3. 3. 5. 3. a few. 3. 6th. Estimating the expense of equity:.......................................................................... 18 Estimation of risk free price:............................................................................. 19 Estimation of beta:........................................................................................... 19 Acquiring the Market risk premium:............................................................... twenty two Estimation of after tax cost of personal debt.................................................................. 23 Estimating the Capital Composition...................................................................... 23

several. 7. Computer Weighted Normal Cost of Capital and...