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Dover Corporation

Dover Corporation. Presented by Greysi Burroughs Rena Huynh Helen Tse. Company Overview Financial Statement Analysis Firm Riskiness Beta Cost of Equity Firm Valuation Discount Dividend Model (DDM) Free Cash Flow Model (FCFM) Multiples (P/E ratio) Final Valuation

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Dover Corporation

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  1. Dover Corporation Presented by Greysi Burroughs Rena Huynh Helen Tse

  2. Company Overview • Financial Statement Analysis • Firm Riskiness • Beta • Cost of Equity • Firm Valuation • Discount Dividend Model (DDM) • Free Cash Flow Model (FCFM) • Multiples (P/E ratio) • Final Valuation • Recommendations Agenda

  3. Brief History • Founded in 1955 • Diversified global manufacturer w/ revenue over $8 Billion • HQ at Downers Grove, Illinois • Traded on NYSE under “DOV” Company Overview

  4. 4 Major Operating Segments • Industry-leading product innovation Provides integrated printing, coding, identification equipment Company Overview 1. Global pump & fluid handling markets 2. Refrigeration systems Provide acoustic components for consumer electric markets *serves life sciences, aerospace, & telecom markets Providing innovative products & solutions that serve drilling, production and downstream markets

  5. Liquidity Ratios Asset Management Ratios Financial Statement Analysis

  6. Financial Statement Analysis Debt Management Ratios Profitability Ratios Market Value Ratios

  7. Economic conditions and uncertainties • Competitive environment • Advanced technology • Increased price/unavailability of raw materials • Litigations • Foreign operations Firm Riskiness

  8. Dover’s computed beta: 1.4 • (Yahoo Finance) Dover beta: 1.5 • Our beta will be used in the Capital Asset Pricing Model that will help calculate the expected return of Dover. Beta

  9. Cost of Equity

  10. Assumptions • Non-constant growth rate: 12.8% • Constant growth rate: 5.5% • Cost of equity: 9.89% Estimated Stock Price for 2012: $50.45 Stock Price as of 12/31/12: $65.39 Valuation: Dividend Discount Model

  11. Assumptions • Based on past 3 years (2011, 2010, 2009) • Created pro forma financial statement for next 10 years • Forecasted unlevered free cash flow • Resulted stock price of_________ Valuation: FCFM

  12. Valuation: Multiples

  13. Final Valuation Estimate

  14. Recommendation

  15. Questions???

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