Equity Research Report: The Case of Accenture

The aim of this paper is to estimate the value of Accenture, analyze the practicality of the CAPM capital asset pricing model in the process of estimating the value of equity in emerging markets, and compare the traditional CAPM with its modified versions. Traditional CAPM model makes it possible to estimate the value of share capital, but it does not allow assessing the risks associated with investing in emerging capital markets. That is why the need to use various modifications of CAPM models, which takes into account more and more unique factors affecting the cost of capital, is growing. These factors, which are not taken into account in the classical CAPM model, include country risk as well. This risk is often associated with the peculiarities and differences of the economies of different countries and, first of all, must be taken into account when assessing the cost of capital within emerging markets, which investors consider to be riskier for capital investments. This factor should also be considered in the process of valuation of equity capital. In the process of building a modified CAPM model, theoretical and methodological provisions were used, which are described forth in the works of J. Mariscal, R. Lee, E.F. Fama, K. R. French, N.Jacob, M.Scholes, F.Black, W.F. Sharpe, H. Markowitz, J. Mossin, C.B. Erb, C.R. Harvey, T.E. Viskanta, A. Damodaran and others. As a result of the research, company’s valuation and the estimated value of its shares were obtained, and two versions of the modified CAPM model used for emerging capital markets were described and analyzed.