Spanish Abstract: La mayoriacute;a de los textos de finanzas corporativas y los analistas presentan el caacute;lculo del Costo Promedio Ponderado de Capital CPPC (tambieacute;n conocido como WACC) como independiente del Flujo de caja libre.Es una praacute;ctica comuacute;n que los analistas calculen...

La versioacute;n espantilde;ola de este artiacute;culo se puede encontrar en lt;a href='http://ssrn.com/abstract=279460'gt;http://ssrn.com/abstract=279460lt;/agt;Most finance textbooks (See Benninga and Sarig, 1997, Brealey, Myers and Marcus, 1996, Copeland, Koller and Murrin, 1994, Damodaran, 1996,...

Everybody uses tax shields when calculating the Weighted Average Cost of Capital (WACC). The textbook formula includes the tax shield with the (1-T) factor affecting the contribution of debt to the WACC. Tax shields are a strange mix of accounting and accrual related to WACC that relies on...

Spanish Abstract: En esta nota pedagoacute;gica presento algunas sugerencias e ideas que puede ser uacute;til tener en cuenta cuando se trata de pronosticar estados financieros a partir de datos histoacute;ricos. Las ideas que se presentan son el resultado de la experiencia de aconsejar a los...

Concession, project-financing and public-private partnership schemes are investment projects that are generally submitted to valuation criteria based on discounted cash flow analysis. The theoretical basis of these valuation criteria are now at issue. Pursuant to recent advances in relational...

Most finance textbooks (See Benninga and Sarig, 1997, Brealey, Myers and Marcus, 1996, Copeland, Koller and Murrin, 1994, Damodaran, 1996, Gallagher and Andrew, 2000, Van Horne, 1998, Weston and Copeland, 1992) present the Weighted Average Cost of Capital WACC calculation as:WACC = d(1-T)D% eE%...

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_U, the return to unlevered equity to calculate the annual tax savings and use K_U to calculate the (present) value of the tax savings. In the...

In the recent writings on valuation, there is no consensus about the correct formulas for calculating the relevant cost of capital in an M amp; M world. The proliferation of alpha number of methods and omega number of theories for the calculation of the cost of capital is puzzling because in the...

In the standard construction of the free cash flow (FCF) in the M amp; M world without taxes, it is assumed that ALL of the generated cash flow is distributed to the debt holder and the equity holder, and there are no surplus funds that are invested in short-term marketable securities. Under...