Similar Search Results

Potential dividends versus actual cash flows in firm valuation

Magni, Carlo Alberto; Velez-Pareja, Ignacio - MASTER CONSULTORES - 2009

Practitioners and some academics use potential dividends rather than actual payments toshareholders for valuing a firm´s equity. We underline the differences between the two methods and present some arguments supporting the thesis that firm valuation with potential dividends overstate the...

Persistent link: https://www.econbiz.de/10010762934

Solución Analítica al Problema de la Circularidad Usando Flujos de Caja Descontados

Mejia, Felipe; Pareja, Ignacio Velez - MASTER CONSULTORES - 2010

Persistent link: https://www.econbiz.de/10010762911

Cálculo correcto y sencillo del valor a precios de mercado. Una comparación con otros métodos.

Vélez-Pareja, Ignacio - MASTER CONSULTORES - 2004

En la práctica financiera y la enseñanza de las finanzas el tratamiento que se le da a algunos de los conceptos más importantes en la evaluación de proyectos y la valoración de empresas en muchos casos es por decir lo menos, ligero. Por un lado está la determinación de los flujos de caja...

Persistent link: https://www.econbiz.de/10010762925

Cost of Capital, Cost of Equity and Value Without Circularity for Constant Growth Perpetuities

Mejía, Felipe; Pareja, Ignacio Velez - MASTER CONSULTORES - 2010

This paper presents a formulation for the cost of equity, the WACC, and the value of equity and firm for growing perpetuities without circularity, using some previous results. We also derive a relationship between leverage, D%, and growth, given a value of debt at instant zero.

Persistent link: https://www.econbiz.de/10010762953

There exists circularity between WACC and value? Another solution

Velez-Pareja, Ignacio; Franco, Julian Benavides - MASTER CONSULTORES - 2008

Although we know there exists a simple approach to solve the circularity between value and the discount rate, known as the Adjusted Present Value proposed by Myers, 1974, it seems that practitioners still rely on the traditional Weighted Average Cost of Capital, WACC approach of weighting the...

Persistent link: https://www.econbiz.de/10010763003

Guidelines for forecasting historical financial statements for valuation purposes

Velez-Pareja, Ignacio - MASTER CONSULTORES - 2008

In this teaching note I list some suggestions that might be useful to take into account when forecasting financial statements departing from historical data. The ideas presented in this note are the result of advising undergraduate and graduate students in the course Econ 195.96/295.96...

Persistent link: https://www.econbiz.de/10010763014

Analytical solution to the circularity problem in the discounted cash flow valuation framework

Mejia, Felipe; Velez-Pareja, Ignacio - MASTER CONSULTORES - 2010

Since the Modigliani and Miller 1958 seminal paper, there has been a problem posed by the fact that the discount rate to value cash flows depends on the value of thesecash flows. This gives raise to the circularity problem.In this paper we propose an analytical solution to this circularity...

Persistent link: https://www.econbiz.de/10010763025

Modeling the Financial Impact of Regulatory Policy: Practical Recommendations and Suggestions. The Case of World Bank

Vélez-Pareja, Ignacio - MASTER CONSULTORES - 2004

World Bank (WB) has played a crucial role in the development of the economies of the world, especially in the emerging countries. We recognize the leadership it has shown and the intellectual authority the WB has on planning offices, practitioners and consultants. For this reason it is very...

Persistent link: https://www.econbiz.de/10010763069

Cost of Equity and WACC for Perpetuities with Constant Growth

Mejia, Felipe; Pareja, Ignacio Velez - MASTER CONSULTORES - 2010

This paper shows a formulation for the cost of equity and the WACC for growing perpetuities. Some authors have derived the general expressions for those formulas but not specifically for perpetuities with constant growth. The result obtained is that a previously general formulation for a finite...

Persistent link: https://www.econbiz.de/10010827955

Applicability of the Classic WACC Concept in Practice

Mian, M. Asif; Velez-Pareja, Ignacio - MASTER CONSULTORES - 2005

A large percentage of companies use the discounted cash flow (DCF) approach as the primary technique of investment … all cases may result in calculation of overly optimistic NPV. Depending on the cash flow pattern, the investment may show …, management, analysts, and other investors using WACC for investment decisions need to be fully aware of its pitfalls and misuse. …

Persistent link: https://www.econbiz.de/10010762937