Abstract

http://ssrn.com/abstract=1266623
 
 

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Valoración de empresas por descuento de flujos: 10 métodos y 7 teorías (Valuing Companies by Cash Flow Discounting: 10 Methods and 7 Theories) (in Spanish)


Pablo Fernandez


University of Navarra - IESE Business School

April 27, 2014


Abstract:     
Spanish Abstract: Este documento es un compendio de los métodos y teorías más utilizados para valorar de empresas por descuento de flujos. Los 10 métodos descritos son: flujos para las acciones descontados a la rentabilidad exigida a las acciones; free cash flow descontado al WACC; capital cash flows descontados al WACC antes de impuestos; APV (adjusted present value); free cash flows ajustados al riesgo del negocio descontados a la rentabilidad exigida a los activos; cash flows para las acciones ajustados al riesgo del negocio descontados a la rentabilidad exigida a los activos; beneficio económico descontado a la rentabilidad exigida a las acciones; EVA descontado al WACC; free cash flows ajustados descontados a la tasa libre de riesgo, y cash flows para las acciones ajustados descontados a la tasa libre de riesgo.

Los diez métodos proporcionan siempre el mismo valor. Este resultado es lógico porque todos los métodos analizan la misma realidad bajo las mismas hipótesis; sólo difieren en los flujos que toman como punto de partida para la valoración.

También se muestran 7 teorías sobre el valor del ahorro de impuestos debido a los intereses (VTS) y su impacto en la valoración.

English Abstract: This paper is a summarized compendium of all the methods and theories on company valuation using discounted cash flows. It shows ten discounted cash flow valuation methods:

1) equity cash flows discounted at the required return to equity;
2) free cash flow discounted at the WACC;
3) capital cash flows discounted at the WACC before tax;
4) APV (Adjusted Present Value);
5) the business's risk-adjusted free cash flows discounted at the required return to assets;
6) the business's risk-adjusted equity cash flows discounted at the required return to assets;
7) economic profit discounted at the required return to equity;
8) EVA discounted at the WACC;
9) the risk-free rate-adjusted free cash flows discounted at the risk-free rate; and
10) the risk-free rate-adjusted equity cash flows discounted at the required return to assets.

All ten methods always provide the same value. This result is logical, as all the methods analyze the same reality under the same hypotheses; they differ only in the cash flows taken as the starting point for the valuation.

The disagreements among the various theories of firm valuation arise from the calculation of the value of the tax shields (VTS). The paper shows and analyses 7 different theories on the calculation of the VTS: No-cost-of-leverage, Modigliani and Miller (1963), Myers (1974), 7 Miles and Ezzell (1980), Harris and Pringle (1985), Damodaran (1994), 7 and Practitioners method.
The paper lists the most important valuation equations according to each of these theories, and also shows how the valuation equations change when the debt's market value is not equal to its book value.

Note: Downloadable document is in Spanish.

Number of Pages in PDF File: 17

Keywords: discounted cash flows, APV, WACC, equity cash flow

JEL Classification: G12, G31, M21

working papers series





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Date posted: September 12, 2008 ; Last revised: May 29, 2014

Suggested Citation

Fernandez, Pablo, Valoración de empresas por descuento de flujos: 10 métodos y 7 teorías (Valuing Companies by Cash Flow Discounting: 10 Methods and 7 Theories) (in Spanish) (April 27, 2014). Available at SSRN: http://ssrn.com/abstract=1266623 or http://dx.doi.org/10.2139/ssrn.1266623

Contact Information

Pablo Fernandez (Contact Author)
University of Navarra - IESE Business School ( email )
Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)
HOME PAGE: http://web.iese.edu/PabloFernandez/
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