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High debt impact on valuation
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The following equity research has the purpose to estimate the value of Rolls Royce Holding plc. After analyzing the company current situation to understand how the future forecast will look like, the increased level of debt of the last years was analyzed to understand who it affected the valuation. The high level of debt, with the decreased profitability, led to a cost of debt of 5.91%. This value was reflected in the WACC estimate, and used to compute the enterprise value with the discounted cash flows method. The computed share price of 237.15p is higher compared to the current market price of 117.14p as it reflects the positive industry trends of the incoming years.
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Valuation Finance Rolls-Royce holding plc Aerospace and defence