A Solution to 'Valuation of the Shares after an Expropriation: The Case of Electrabul'

11 Pages Posted: 15 Feb 2013 Last revised: 2 Jun 2019

See all articles by Pablo Fernandez

Pablo Fernandez

University of Navarra - IESE Business School

Date Written: May 28, 2019

Abstract

The “VERAVAL Valuation” forecasts a great future for ElectraBul with solid customer, sales and FCF growth. Between 2010 and 2019 the customer base is expected to grow by 60%, sales in MWh by 72%, etc. However, the “VERAVAL Valuation” concludes that the value of ElectraBul shares in April 2010 was $4.858 million.

Four comparisons below support the conclusion that the “VERAVAL Valuation” falls short even in terms of the most basic common sense.

Seven misconceptions in the “VERAVAL Valuation” are outlined and their enormous impact on the valuation is quantified.

Keywords: valuation, emerging county, errors in valuation, Free Cash Flow, electric company

JEL Classification: G12, G31, M21

Suggested Citation

Fernandez, Pablo, A Solution to 'Valuation of the Shares after an Expropriation: The Case of Electrabul' (May 28, 2019). Available at SSRN: https://ssrn.com/abstract=2217604 or http://dx.doi.org/10.2139/ssrn.2217604

Pablo Fernandez (Contact Author)

University of Navarra - IESE Business School ( email )

Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

HOME PAGE: http://web.iese.edu/PabloFernandez/

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