Discussion 1
• 4"Free Cash-Flow Valuations" Please respond to the following:
• Create an argument that use of the present value free cash-flow method has a more beneficial economic meaning than earnings-based methods. Provide support for your argument.
• Assess the challenges related to using the present value of the free cash-flow valuation method in practice, suggesting how each of these challenges may be overcome. Provide support for your rationale.
Discussion 2
"Negative Cash Flow" Please respond to the following:
• Assess how the free cash-flow method can be used when a company is profitable yet the cash-flow values are expected to be negative over the next five years, indicating the likely impact on the valuation. Provide support for your rationale.
• Assess which cash-flow variables are the most sensitive to change and the likely impact on a firm's valuation. Provide support for your answer.
Discussion 3
"Earnings-Based Valuation" Please respond to the following:
• Create an argument supporting that using the earnings-based valuation method yields the most accurate results. Provide support for your argument.
• Assess the challenges related to using the earnings-based valuation method in practice, suggesting how each of these challenges may be overcome. Provide support for your rationale.
Discussion 4
"Accounting Methods" Please respond to the following:
• Evaluate the likely impact on a firm's valuation when using U.S. GAAP versus IFRS accounting methods, indicating which accounting standards you believe may yield a more favorable result. Provide support for your position.
• Determine how a firm's valuation using the earnings-based valuation method would be impacted when using aggressive versus conservative accounting. Provide evidence supporting your conclusion.