Unlocking the Value of Companies: New Cash Flow Valuation Methods Revealed
The article explores different ways to value companies using discounted cash flow methods. It looks at companies with no growth, those with continuous growth, and the general case. The researchers define different types of cash flow used in valuation and determine the appropriate discount rates for each. They find that the value of a company's equity remains the same, regardless of the specific discounted cash flow formula used, as long as the expected cash flows are consistent.