TNS Limited- Financial Strategy Options

Running head: CORPORATE FINANCE
TNS Financial Services
Name of the Student:
Name of the University:
Author’s Note:

1TNS LIMITED- FINANCIAL STRATEGY OPTIONS
Executive Summary
The aim of the project is to understand the valuation estimate of the TNS Limited and the
funding of the company via the different funding structures such as debt or equity. The valuation
of the TNS Limited was evaluated considering the DCF valuation to determine the actual
valuation of the company and the way in which the same differs from the original value in the
market was compared. There were other capital structures considered for evaluating the funding
source for the company such as the primary source of capital raising i.e., Initial Public Offering.
It also considers capital structure, management technique and other investment related factors
while evaluating the management decisions regarding capital structure and investment decision
of a company. From the shareholders perspective.

2TNS LIMITED- FINANCIAL STRATEGY OPTIONS
Table of Contents
Introduction......................................................................................................................................3
Discussions......................................................................................................................................3
Present Recommendations...........................................................................................................3
Valuation of TNS using multiples...............................................................................................8
Recommendations on proposed IPO structure............................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................12

3TNS LIMITED- FINANCIAL STRATEGY OPTIONS
Introduction
The company TNS Limited should evaluate various financial strategy and decide upon
the best funding strategy for the company. The different source of funding for the company
depends on the capital structure of the company and the financing structure for the company. The
distribution of the ownership structure and the preferred finance structure for the companies were
evaluated depending on the profile of the investors (Abushammala and Sulaiman 2014). Existing
and old shareholders preferred a safe and a different capital structure for the financing of the
project while the new generation was more aggressive in deciding upon the capital structure of
the company. The funding source for the company could be aggressive if the company goes for
the primary issue of equity shares i.e., Initial Public Offering (Asquith and Weiss 2016).
Discussions
Present Recommendations
The growth project of the company is evaluated with the different capital structures of the
company and the incremental funding requirement for the same will be evaluated depending on
the capital structure of the company. The funding of the growth project has been evaluated based
on the three key options of the project (Atanasov and Black 2016). The capital structure of the
company currently is based on the debt to equity structure of the company, which is around
10:90 ratio for debt to equity ratio of the company. The WACC was determined keeping the debt
to equity ratio of 10:90 and the following interest rate for the discount rate was taken into
consideration for the evaluation of the WACC (Bancel and Mittoo 2014). Tax rate was taken into
consideration for the evaluation of cost of debt. The company has been presented with the three
possible options for financing the growth project. The capital structure for each of the option will