Graphical Summary of the Basic Ideas on Valuation
March 20, 2006
This is a summary of the basic ideas on valuation depicted as a conceptual map. Under the assumption that Capital Asset Pricing Model, CAPM, works and that the discount rate for the tax savings is Ku, I show the sequence of calculations and interactions among the variables, beta, values, cash flows and discount rates. We might consider that Ku is the origin of everything.
Note: The Spanish version is available at: http://ssrn.com/abstract=892488
Number of Pages in PDF File: 4
Keywords: WACC, valuation methods, cash flows
JEL Classification: D61, G31, H43working papers series
Date posted: March 29, 2006
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