The share price valuation is done using Dividend Discount Model which is useful only for the companies that pay dividends. Other models are also described but not done due to constraints like time.
While comparing the performance of the company with its competitors, only the significant rivals are taken. There are mainly three domestic competitors and two global companies that are significant to compete with A.G. Barr as described in the previous section. The comparison of performance with limited number of competitors may limit the results and analysis.
Under this chapter, the outlook of global economy as well as the UK economy are studied. The consequences of them on the chosen company i.e. on A.G. Barr Plc. are also discussed. The global economy and the macro-economic factors that influence the industry are analyzed and the UK economy as well. This chapter concludes with the consequences of these economies on A.G. Barr.
The GDP for global economy after adjusting for inflation has increased to 3.3% in 2014 from 2.9% in 2013 which is significant in developed economies. Though the Eurozone is expected to grow, it is reversed in 2014 due to bad weather. The growth of GDP in developing economies has decreased slightly in 2014. The economic transformations of China slowed down its increase. Emerging economies such as Russia, Brazil and Central Asia exhibit a deceleration in growth rates, whereas India, Mexico and other emerging nations in Asia witness minor improvement in their performance (Conference-board.org, 2014).
For a third year in row, developing countries are facing a disappointing growth below 5 percent. This is due to the weakness in first quarter of 2014 which hindered an anticipated increase in economic activity according to recent Global Economic Prospects report of World Bank. This report was delivered on 10 June, 2014. On the other hand, the recovery in high income countries is increasing in a fast pace even though United States faced a weakness in the first quarter. It is expected that these economies will grow by 1.9 percent in 2014. The growth is expected to increase to 2.4% and 2.5% in 2015 and 2016 respectively (The World Bank, 2014).