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IBEX 35 : 1991-2009 - Value Creation and Return
Fernandez, Pablo - 2010
We compute the shareholder value creation and the return of the companies in the IBEX 35 for the 18-year period 1991-2009. The average return was 12.5%, but 4.4% was due to the decline in interest rates (from 13% to 4%). The shareholder value creation in the whole period was 101 billion euros,...
Persistent link: https://www.econbiz.de/10013148636
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The most common error in valuations using WACC
Fernández, Pablo - 2020
To value shares there are two usual methods that, if properly applied, provide the same value: 1/ Present value of expected free cash flows (FCF) discounted with the WACC rate and then, subtract the value of debt; and 2/ Present value of expected equity cash flows (ECF) discounted with the Ke...
Persistent link: https://www.econbiz.de/10012704170
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Analytical Solution for Optimal Capital Structure in Perpetuities
Tham, Joseph - 2011
We derive and present the formula for optimal debt under the assumption that tax shields are discounted at the cost of levered equity, Ke and cash flows are on perpetuity. The formulation is consistent and is derived from basic financial principles. This formulation is valid for non-growing...
Persistent link: https://www.econbiz.de/10013132251
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Cost of Equity and WACC for Perpetuities with Constant Growth
Mejia-Pelaez, Felipe - 2011
This paper presents a formal derivation of general expressions for Ke and WACC in perpetuities with constant growth, which do not make any assumption on what the proper discount rate is to be applied to the firm's tax shield, and are complemented with numerical examples of its application....
Persistent link: https://www.econbiz.de/10013133176
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Postmodern Corporate Finance
Milano, Gregory V. - 2010
“Postmodern” corporate finance builds on the principles of modern corporate finance while restoring at least part of the emphasis on top-line growth that prevailed before the intense emphasis on returns on capital brought on by the ongoing shareholder value movement. The vast majority of...
Persistent link: https://www.econbiz.de/10013137053
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Timanco S.A : Unpaid Taxes, Losses Carried Forward, Foreign Debt, Presumptive Income and Adjustment for Inflation: Matching DCF and EVA©
Velez-Pareja, Ignacio - 2010
There are methods to match value added approaches (Residual Income Method, RIM and Economic Value Added, EVA) with discounted cash flow methods, DCF. In this note we use a real life case from an emerging country to illustrate the matching, with complexities such as unpaid taxes, losses carried...
Persistent link: https://www.econbiz.de/10013140033
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A Simple Error-Proof Approach to Find Composite Discount Rates Such as CoLE, WACC and the Like
Cheremushkin, Sergei Vasilievich - 2011
in theory. In my papers “How to Avoid Mistakes in Valuation: guidelines for practitioners” and “Capital Structure …
Persistent link: https://www.econbiz.de/10013121860
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How to Ensure Consistency between Discount Rates and Cash Flows?
Cheremushkin, Sergei Vasilievich - 2012
valuation requires attention to plenty of details. The slightest negligence or insufficient knowledge of underlying theory can …
Persistent link: https://www.econbiz.de/10013102130
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In Search of the 'Lost Capital' : A Theory for Valuation, Investment Decisions, Performance Measurement
Magni, Carlo Alberto - 2012
nonstandard theory of residual income. It is derived from the notion of “unrecovered” capital, which is here named “lost” capital … the simple average residual income play a major role in valuation; a dual relation between the standard theory and the … lost-capital theory is proved, clarifying the way periodic performance is computed in the two paradigms and the rationale …
Persistent link: https://www.econbiz.de/10013104372
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Optimal Capital Structure for Finite Cash Flows
Mejia-Pelaez, Felipe - 2013
La versión española de este artículo se puede encontrar en: "http://ssrn.com/abstract=1826264" http://ssrn.com/abstract=1826264This paper shows how to proceed to find the optimal capital structure and value with period-to-period constant and variable leverage, when the discount rate for tax...
Persistent link: https://www.econbiz.de/10013093640