Volkswagen: equity valuation

Abstract

This research paper presents an equity valuation of Volkswagen (VW) using three intrinsic valuation models: the Dividend Discount Model (DDM), the Residual Income Model (RIM), and the Discounted Cash Flow Model (DCF). The objective of this study is to provide an investment analysis of the future of VW financially. The research question that this paper addresses is: What is the intrinsic value of Volkswagen's equity based on its financial performance and future prospects? The study uses financial data from VW's annual reports and other publicly available sources. The results of the three valuation models are compared and analyzed to arrive at an estimate of VW's equity value. The findings of this study show that the DDM, RIM, and DCF models all indicate that VW's equity is undervalued during 2021. The implications of this research are significant for investors who are interested in investing in VW. The study suggests that VW's equity may be a good investment opportunity, particularly for those who are looking for long-term investments. However, investors should carefully consider the risks associated with investing in the automotive industry and should conduct further research before making any investment decisions. Overall, this study provides valuable insights into the financial prospects of VW and demonstrates the usefulness of intrinsic valuation models in equity valuation.