Define discounting the equity cash flow, Financial Management

Assignment Help:

Which of these two methods is better: discounting the Equity Cash Flow or discounting the Free Cash Flow?

The results we get by discounting the Equity Cash Flow and the Free Cash Flow are identical (or else, one or both of the valuations are incorrect).  Personally, discounting Equity Cash Flows is better than discounting the Free Cash Flow (I find the flow and the discount rate more intuitive). I also like to balance this valuation with the APV

 


Related Discussions:- Define discounting the equity cash flow

Major linen purchase on open account, that the business has far fewer linen...

that the business has far fewer linens than it needs, so he makes a major linen purchase on open account. Which of the following terms refers to the fact that partners Ma and Runni

Estimating the market value of a share, Estimating the market value of a sh...

Estimating the market value of a share The dividend expansion model suggests a method whereby share values can be estimated from information on the required return on equity an

Advantage of profitability index method, Q. Advantage of Profitability Inde...

Q. Advantage of Profitability Index method? Advantage of PI method:- (i) Similar to the other DCF techniques the PI method as well takes into account the time value of money

Value of conversion benefits, Having seen the measure used for ...

Having seen the measure used for analyzing the convertible bonds, let us now examine the merits and demerits of convertible bonds, and why or wh

Volume of issues of central and state government securities, Volume of Issu...

Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k

Can a corporation have too much working capital, Can a corporation have too...

Can a corporation have too much working capital?  Explain. A firm can have in excess of working capital if it is losing the opportunity to invest in high returning fixed assets

Agency problem, Discuss how a business might limit agency problem between m...

Discuss how a business might limit agency problem between management and creditors

Effect of volatility and the arbitrage free value, The volatility ass...

The volatility assumption has a great influence on the arbitrage free value of the bond. The higher the expected volatility, the greater the value of an option. W

Corporate debt, which critically examines the benefits and risks to a compa...

which critically examines the benefits and risks to a company, of incorporating corporate debt into a portfolio of equity and debt.

What is abc analysis, Q. What is ABC Analysis? ABC Analysis: - ABC Anal...

Q. What is ABC Analysis? ABC Analysis: - ABC Analysis is a method of controlling different items of inventory. Generally a firm has to maintain several different items as inven

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd