Corporate Valuation of Foreign Vs Local Oil Companies

Abstract

This report highlights the information, experiences and knowledge gathered by us about “The application of valuation theory to Foreign Oil Company and the Local Oil Company of Pakistan.” The research objectives are to make comparison of Pakistani Oil Company with the foreign Oil Company and to Enhancing the practical knowledge of the essential elements of corporate finance. Making it easy for others to understand by calculating WACC, forecasted financial statements and Valuation of oil companies situated in Pakistan. Rationale of the study is to find out the WACC of a Pakistani Oil Company and a foreign oil company. The financial statements for five years will be forecasted for valuation. The benefit of this research is to apply the theory of business valuation to practice. Also this research will help in understanding the difference between the cost of capital, forecasted financial statements and valuation of Pakistani Oil Company and foreign Oil Company. Researchers will end this report by calculating the current market price of shares of PSO and Shell on the basis of expected future cash flows.