Valuation of a television company in Peru

Abstract

The objective of this work is to make the valuation of a television company in Peru and find the fundamental value of the action at the end of 2017 (base year). The television company under study is one of the most important open signal television houses nationwide and it’s exclusively dedicated to the sale of advertising space through its own or third-party television programs, which are transmitted through the programming of the television company. During the period 2012-2017, it has presented a sustained growth in sales with a compound annual rate of 12.6 %, although the telecommunications market, especially the television sector, maintains a fairly low level of investment compared to other countries in the region. Considering this context, interviews were carried out with the main executives of the company and the majority shareholder of the firm. From these, variables such as average prices for advertising space, special events maintained by the company according to contracts and a series of factors that influence financial projections were obtained. Likewise, the cost of capital of the corporation was revealed, an important indicator for the valuation of the company subject of investigation. Finally, after analyzing and valuing the television company, it is concluded that the shareholders would expect an appreciation of the value of the share due to the potential growth of the business, the growth of the sector and the positioning of the company.