--%>
Assignment Help - homework help

Illustrates financial consultant has valuations of company

A financial consultant obtains various valuations of my company when this discounts the Free Cash Flow (FCF) as opposed to when this uses the Equity Cash Flow. Is it correct?

E

Expert

Verified

No. Various methods of valuation by discounting flows always give the same value (when done correctly). In Fernández (2006 and 2004) shows that 10 methods of valuation through the method of flows discount always give the same value. That result is logical as all the methods analyze identical reality under the same hypothesis; they are different just in the cash flows they use as a starting point into the valuation.

   Related Questions in Corporate Finance

  • Q : Problem regarding purchasing machine

    Alger Corp needs to buy some construction equipment for $50,000 that has a helpful life of 4 years with no salvage value. The Alger utilizes straight-line depreciation. Alger contains a tax rate of 30%, and it employs a discount rate of 10%. The equipment will produce

    		•
  • Q : Which currency is utilized in an

    Which currency has to be utilized in an international acquisition in order to compute the flows?

    		•
  • Q : APR of Loan When you take out an $8,000

    When you take out an $8,000 car loan that calls for 48 monthly payments of $225 each, then what is the APR of loan?

    		•
  • Q : Long-Term Debt What are Long-Term Debt

    What are Long-Term Debt and what are their main parts.

    		•
  • Q : Earnings management What do you mean by

    What do you mean by Earnings management and what are their actions and activities?

    		•
  • Q : Explain value of shares is Is this

    Is this correct that the value of the shares is, the “value of the results’ capitalization” that, as per to the Institute of Accounting and Auditing (ICAC) shows “the sum of the expected future results of the company throughout a certain period

    		•
  • Q : Is net income of a year is doubtful for

    Is the net income of a year money the company made that given year or is this a number whose importance is quite doubtful?

    		•
  • Q : Relation between book value of shares

    Is the relation in between book value of shares or capitalization a good guide to investments?

    		•
  • Q : Zurich Pvt Ltd. You have joined Zurich

    You have joined Zurich Pvt. Ltd as a Finance manager. You are given the following information: Zurich Pvt Ltd. is a diversified manufacturing firm dealing with electrical appliances. In 2012, the firm reported an operating income of Rs. 857.60 million and faced a tax rate of 35% on income. The firm

    		•
  • Q : What are Stock exchanges Stock

    Stock exchanges: A stock exchange provides services useful for trading, issue and redemption of shares and other securities for traders and brokers. They will also provide facility for payment of income and dividends for listed securities. Securities

    		•