arXiv Open Access 2010

The Validity of Company Valuation Using Discounted Cash Flow Methods

Florian Steiger

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Abstrak

This paper closely examines theoretical and practical aspects of the widely used discounted cash flows (DCF) valuation method. It assesses its potentials as well as several weaknesses. A special emphasize is being put on the valuation of companies using the DCF method. The paper finds that the discounted cash flow method is a powerful tool to analyze even complex situations. However, the DCF method is subject to massive assumption bias and even slight changes in the underlying assumptions of an analysis can drastically alter the valuation results. A practical example of these implications is given using a scenario analysis.

Topik & Kata Kunci

q-fin.GN q-fin.PR

Penulis (1)

Florian Steiger

Format Sitasi

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Steiger, F. (2010). The Validity of Company Valuation Using Discounted Cash Flow Methods. https://arxiv.org/abs/1003.4881

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Informasi Jurnal

Tahun Terbit: 2010
Bahasa: en
Sumber Database: arXiv
Akses: Open Access ✓