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In this article we use a real life case from an emerging country to illustrate the valuation with discounted cash flow methods that include complexities such as unpaid taxes, losses carried forward, foreign exchange debt, presumptive income and inflation adjustments to the Financial Statements....
Persistent link: https://www.econbiz.de/10013132604
This article introduces a new financial metric for managerial performance evaluation, Value Added to Invested Capital (VAIC), with the cost of unlevered equity as a hurdle rate to calculate the capital charge rather than the widely accepted WACC. VAIC preserves all positive features of the...
Persistent link: https://www.econbiz.de/10013091020
The Spanish version of this paper can be found at: "http://ssrn.com/abstract=1996731" http://ssrn.com/abstract=1996731 This teaching note is devoted to the definition and calculation of cash flows, namely, cash flow to debt, (CFD), cash flow to equity, (CFE), capital cash flow, (CCF), tax...
Persistent link: https://www.econbiz.de/10013039111
This is an annotated appendix that accompanies the paper. In this note, we provide detailed commentary on a numerical example that illustrates the ideas that we discuss in the main paper. The numerical example is in Table18.10, Chapter 8, page 656, of the third edition of Corporate Finance,...
Persistent link: https://www.econbiz.de/10012888920
In this note, we extend a numerical example in the textbook by Berk & DeMarzo that matches methods for only when K<sub>TS</sub> is equal to K<sub>D</sub>. We show that there is a generalized formulation for the return to levered equity K<sub>E</sub> that works for any value of K<sub>TS</sub>, the appropriate discount rate for the tax...
Persistent link: https://www.econbiz.de/10012889082
Principles of Cash Flow Valuation, published by Academic Press, Elsevier, in 2004, is the only book available that focuses exclusively on cash flow valuation, with a special emphasis on the Capital Cash Flow (CCF) approach.This text provides a comprehensive and practical, market-based framework...
Persistent link: https://www.econbiz.de/10012889424
This paper presents three different approaches for calculating the levered annual values for a finite cash flow profile. In the first approach, we use K<sub>U</sub>, the return to unlevered equity to calculate the annual tax savings and use K<sub>U</sub> to calculate the (present) value of the tax savings. In the...
Persistent link: https://www.econbiz.de/10012832637
The valuation of assets, both tangible and intangible, is an important element of corporate finance. Putting a price tag on ideas is almost impossible, and in the new economy, where companies grow dependent on intangible assets all the time, market volatility can be attributed in large part to...
Persistent link: https://www.econbiz.de/10012674024