Stochastic Discounted Cash Flow [electronic resource] : A Theory of the Valuation of Firms / by Lutz Kruschwitz, Andreas Löffler.
By: Kruschwitz, Lutz [author.]
Contributor(s): Löffler, Andreas [author.] | SpringerLink (Online service)Material type: TextSeries: Springer Texts in Business and Economics: Publisher: Cham : Springer International Publishing : Imprint: Springer, 2020Edition: 1st ed. 2020Description: XXIII, 241 p. 24 illus. online resourceContent type: text Media type: computer Carrier type: online resourceISBN: 9783030370817Subject(s): Macroeconomics | Investment banking | Securities | Business mathematics | Macroeconomics/Monetary Economics//Financial Economics | Investments and Securities | Business MathematicsAdditional physical formats: Printed edition:: No title; Printed edition:: No title; Printed edition:: No titleDDC classification: 339 LOC classification: HB172.5Online resources: Click here to access online
Introduction: A Stochastic Approach to Discounted Cash Flow -- Basic Elements: Cash Flow, Tax, Expectation, Cost of Capital, Value -- Corporate Income Tax: WACC, FTE, TCF, APV -- Personal Income Tax -- Corporate and Personal Income Tax -- Proofs -- Sketch of Solutions.
This open access book discusses firm valuation, which is of interest to economists, particularly those working in finance. Firm valuation comes down to the calculation of the discounted cash flow, often only referred to by its abbreviation, DCF. There are, however, different coexistent versions, which seem to compete against each other, such as entity approaches and equity approaches. Acronyms are often used, such as APV (adjusted present value) or WACC (weighted average cost of capital), two concepts classified as entity approaches. This book explains why there are several procedures and whether they lead to the same result. It also examines the economic differences between the methods and indicates the various purposes they serve. Further it describes the limits of the procedures and the situations they are best applied to. The problems this book addresses are relevant to theoreticians and practitioners alike.
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