A New Method of DCF Valuation

• Autorzy: Marek Capiński
• Języki publikacji: EN

Abstrakty

EN

Among many valuation methods the one based on computing the present value of the expected future cash flows is indisputably regarded as the best. The question is what kind of cash flow we should consider and what is the discount rate. The main goal is to estimate the market value of equity; therefore one should take into account the cash flow for the shareholders and use the cost of equity as the rate. This approach is called the direct method (see [BS]). The indirect method is based on free cash flows discounted by the weighted average cost of capital and then subtracting the value of debt, which, if the credit risk is ignored, is close to the book value and so is easily available. (fragment of text)

Słowa kluczowe

EN

Cash flows; Discounted cash flow (DCF)

PL

Przepływy pieniężne; Metoda zdyskontowanych strumieni pieniężnych

• Czasopismo: Nowy Sącz Academic Review
• Rocznik: 2005
• Tom: 2
• Strony: 52--58

Twórcy

autor

Marek Capiński

• Nowy Sacz School of Business - NLU

Bibliografia

• S.Benninga, O.Sarig, Corporate Finance: A valuation Approach, McGraw-Hill, 1996.
• P.Fernandez, Valuation and Shareholder value Creation, Academic Press, San Diego 2002.
• P.Fernandez, The correct value of tax shields. An analysis of 23 theories, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=276051