Harmonization and Financial Statement Comparability †Free Samples

Question: Discuss about the Harmonization and Financial Statement Comparability. Answer: Introduction: From the relevant evaluation it could be identified that Peru has operations in Argentina, Brazil, Chilli, and Mexico, which allows the organisation to target high paying clients. Operations of the organisation are adequately conducted in international borders, which could help in increasing its value. The overall net income of the organisation mainly went from $225 million to negative $765 million. However, relevant investments that was conducted by the organisation on its operations which amounted to $1.5 billion. However, the operations of the organisation were not providing adequate results which allowed Entel to quote a price of $397 million and $415 million. After the valuation of the case study it could be identified by Peru has been conducting operations in different countries which tends to increase the risk involved in operations of the organisation. The evaluation of the market directly indicated a correlation and Country risk premium that needs to be addressed by the organisation. Furthermore due to globalisation has relevantly market comprising in different countries has mainly become huge market. Therefore, it could be understood that all the markets are interlinked as organisations listed it one market also invests in different markets to generate higher return. Hence, DAnconia mainly needs to focus in Global market and understand the relevant risk that would affect Peru stock market. Adequate standard deviation is mainly used to identify Perus stock returns and bond yields. The relevant estimation of country risk premium could be affected from the overall capital market, as any kind of negative impact food increase volatility and raise risk from investment. Loughran and McDonald (2016) mentioned that use of adequate valuation directly help in deriving the relevant risk involved in investments. Particulars Value Stock returns relative Peru Peru / US Stock returns relative Peru 0.09 / 0.047 Stock returns relative Peru 1.93 30 year bond yield relative Peru Peru bond / US bond 30 year bond yield relative Peru 0.009 / 0.007 30 year bond yield relative Peru 1.34 From the relevant evaluation of the above table stock returns of Peru can be identified, 30 year bond yield Peru. Moreover, the stock returns are mainly calculated at 1.93, while the 30 year bond yields are detected at 1.34. The overall values could mainly be used in the calculation for deriving the overall country risk premium. Kothari, Mizik and Roychowdhury (2015) argued that without adequate valuation of beta and other relevant valuation actual country risk premium could not be detected. Depicting Nextel Perus estimated asset beta and what is its estimated required return on assets, while considering the estimates of cost of capital, long-range growth rate and free cash flow: Relevant calculation of the required return is also conducted, which comprises with the country risk premium to detect the modified CAPM formula. The required rate of return formula directly comprises from the valuation of country risk premium. Moreover, the required rate of return also detects and uses risk free rate, and beta of the organisation. Hence, the relevant risk factor in emerging markets is different, where adequate Lambda is used to separately identify different types of risk. The Beta calculation may be calculated with the help relevant data, where beta of Peru can be identified with adequate formula, which directly indicates that the beta of the company is at 0.62. The overall results of Beta would be used in different formulas to detect the relevant risk involved an investment. In this context, Hoskin, Fizzell and Cherry (2014) stated that use of relevant investment option could eventually help in generating higher revenue from investment and detection of Beta could allow investors you identify a risk factors of the stock. Particulars Value US risk free rate 3.08% Peru risk free rate 5.05% US MRP 5% US cost of capital 6.56% Peru Cost of capital 8.60% With the help of the above table adequate us cost of capital is mainly calculated, where does period of US, beta, US MRP and country MRP is mainly used to detect overall cost of capital of US. Furthermore, the relevant formula is also used arrived Peru cost of capital, which is identified in the above team. Furthermore derivation of the cost of capital would eventually help in identifying relevant actual value of the organisation. This detection could also help in deriving required return that is needed by Peru. This derivation helps in identifying the overall value of the firm in future. Warren, Reeve and Duchac (2013) mentioned that detection of the required return mainly allows the investor to compare the actual return provided by the company. Particulars Value Growth US 3.00% Growth Peru 5.90% FCF0 11,731 FCF1 16,659 Unlevered Value 616,992 StDev Peru 9% StDev US 4.66% Rel StDev Peru 193.13% StDev debt Peru 27.35% Country MRP 0.65% With the help of adequate growth rate and growth value the overall forms actual value is being calculated. Show the map the calculation directly the text that the overall form values at $616.992 million, which is relatively undervalued. Therefore, the current valuation the organisation relatively undervalued, which might in turn help in detecting the overall growth rate FCF value. Reference and Bibliography: Amiraslani, H., Iatridis, G.E. and Pope, P.F., 2013.Accounting for Asset Impairment: A Test for IFRS Compliance Across Europe: a Research Report by the Centre for Financial Analysis and Reporting Research, Cass Business School. 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