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The calculations below outline how an intrinsic value for
Australian Ethical Investment
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (AUD, Millions)||A$0.18||A$0.20||A$0.23||A$0.25||A$0.28|
|Source||Extrapolated @ (11.86%)||Extrapolated @ (11.86%)||Extrapolated @ (11.86%)||Extrapolated @ (11.86%)||Extrapolated @ (11.86%)|
Discounted (@ 8.55%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = A$0 × (1 + 2.76%) ÷ (8.55% – 2.76%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
A$4 = A$1 + A$3
Value = Total value / Shares Outstanding (A$4 / 1)Discount to Share Price
Value per share:
Current discount (share price of A$131): -3366.38%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.55% = 2.76% + (0.8 * 7.24%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (A$146,841,830).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.569 = 0.569 (1 + (1- 30%) (0%))
Levered Beta used in calculation = 0.8
Mr. Phillip A. Vernon, also known as Phil, BEc, MCom, MBA, FCA, FAICD is the Managing Director at Australian Ethical Investment Ltd. since July 2010 and serves as the Chief Executive Officer since December 2009 and Executive Director since July 27, 2010. He provides overall leadership and strategic direction to the company including acting as a direct liaison between the Board and the senior management team. Mr. Vernon is also a Director of Australian Ethical Superannuation Pty Limited and Australian Ethical Foundation Pty Limited. He is a Director of the Responsible Investment Association of Australia. Mr. Vernon is also a Director of Environmental Foundation and the Chairman Beyond Zero Emissions. He is a Fellow of the Australian Institute of Company Directors and the Australian Society of Certified Practicing Accountants. Mr. Vernon has a vast experience in financial services covering funds management, superannuation, corporate governance and industry regulation. He holds the FCA and FAICD designations. Mr. Vernon also holds B.Ec., M.Com., and M.B.A. degrees.
Average tenure of the Australian Ethical Investment management team in years:
Average tenure of the Australian Ethical Investment board of directors in years:
Australian Ethical Investment Ltd is a publicly owned investment manager. The firm launches and manages equity, fixed income, and balanced mutual funds for its clients. It invests in the public equity and fixed income markets across the globe. The firm invests in clean energy, sustainable products, medical solutions, innovative technology, responsible banking, healthcare, recycling, energy efficiency, education, and aged care. It does not invest in coal, coal seam gas, oil, weapons, tobacco, logging, exploitation, gambling, human rights abuses, and harmful products. Australian Ethical Investment Ltd was founded in 1986 and is based in Sydney, Australia.
|Name:||Australian Ethical Investment Ltd|
Australian Ethical Investment Ltd
130 Pitt Street,
New South Wales, 2000,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|ASX||AEF||Ordinary Shares||Australian Securities Exchange||AU||AUD||17. Dec 2002|
|Industry:||Asset Management and Custody Banks|