Valuation of Proctor & Gamble (P&G) Case

This relates to chapter 8 Finance & accounting issues, LO 8.3

Added Notes: The purpose of this exercise is to re-calculate the 4 evaluation methods for the next year in the sequence which is 2018. You are to show your work as I may give partial credit for the right calculation but wrong answer. The most likely value is an actual dollar amount; explain why that amount. In steps 3 & 4, I am not asking for a definition. What is unique to the number in this exercise. If you did not follow this expanded guidance, you can re-accomplish and upload over the old submission.

The Proctor & Gamble Corporation is used as an example for chapter 8. There are several tables and charts of financial and accounting data.

• Use the EOY values based on those projected for 2018 (not actual for 2017)
• Assume same number of shares outstanding and a stock price of 91.18
• EPS is calculated as NI/shares

Accomplish these 4 steps

1. Calculate the corporate valuation of P&G for 2018 using the 4 evaluation methods. You must show your work to derive the valuation for credit.
2. What is the most likely value of the firm and why?
3. Comment on the goodwill & intangibles; significance?
4. Comment on the treasury stock and effect; significance?

8.2: Projected Financial Statements Table 8-8 P8G's Projected income Statements for 2018, 2019, and 2020 (in millions) Tahle R-Q Deci's Proiected Balanced Sheets for 2018, 2019, and 2020 (in millions) 8.2: Projected Financial Statements 8.2: Projected Financial Statements \begin{tabular}{|c|c|c|c|} \hline Retained Earnings & 98,089 & 100,275 & 102,725 \\ \hline Treasury Stock & (93,715) & (93,715) & (93,715) \\ \hline Paid in Capital \& Other & 49,360 & 52,360 & 52,360 \\ \hline Total Equity & 57,743 & 62,929 & 65,379 \\ \hline Total Liabilities and Equity & 119,588 & 126,028 & 131,061 \\ \hline \end{tabular} Table 8-11 P8G's Retained Earnings Data Table (in millions)