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Muchos consultores, autores y profesores de Finanzas incluyen los cambios en losactivos liquidos (dividendos potenciales") en los flujos de caja. Esta practica escontraria a la teoria basica de las finanzas. Presentamos razones economicas, teoricas, yempiricas para apoyar la tesis. Por lo tanto,...
Persistent link: https://www.econbiz.de/10010762913
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
than the economy or the industry. This approach might be considered somewhat standard in the sense that usually they either …
Persistent link: https://www.econbiz.de/10010762940
This paper is an extension of a previous one untitled The Correct Definition for the Cash Flows to Value a Firm (Free Cash Flow and Cash Flow to Equity) . We have added a comparative analysis between the current practice of including as cash flows amounts that belong to the Balance Sheet and the...
Persistent link: https://www.econbiz.de/10010762961
Usualmente los textos de finanzas presentan por lo menos un capítulo sobre análisis financiero, entendido como análisis de razones financieras. Se enseñan muchos cursos en análisis financiero y se gasta una enorme cantidad de tiempo en cómo calcular las razones financieras basados en...
Persistent link: https://www.econbiz.de/10010762968
In Velez-Pareja and Tham (2001), we presented several different ways to value cash flows. First, we apply the standard …
Persistent link: https://www.econbiz.de/10010762982
In this short teaching note I explain why we subtract the change in working capital from the proper item (Earnings before interest and taxes (EBIT) or Net income) in the Income Statement. I show in detail how departing from the sales revenues and the cost of goods sold we have to subtract the...
Persistent link: https://www.econbiz.de/10010762993
Practitioners and academics in valuation include changes in liquid assets (potential dividends) in the cash flows. This widespread and wrong practice is inconsistent with basic finance theory. We present economic, theoretical, and empirical arguments to support the thesis. Economic arguments...
Persistent link: https://www.econbiz.de/10010763000
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
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