Introduction: A Stochastic Approach to Discounted Cash Flow -- Basic Elements: Cash Flow, Tax, Expectation, Cost of Capital, Value -- Corporate Income Tax: WACC, FTE, TCF, APV -- Personal Income Tax -- Corporate and Personal Income Tax -- Proofs -- Sketch of Solutions.

Since private equity investments are not publicly traded, a key issue in measuring investment risks of institutional private equity investors arises from a careful measurement of investment returns in the first place. Prices of private equity investments are typically observed at low frequency...