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Title:Equity shares equating the results of FCFF and FCFE methods PDF Logo
Authors:Cegłowski, Bartlomiej
Podgórski, Blażej
Issue Date:2012
Citation:[Journal:] e-Finanse: Financial Internet Quarterly [ISSN:] 1734-039X [Volume:] 8 [Year:] 2012 [Issue:] 2 [Pages:] 34-43
Abstract:The aim of the article is to present the method of establishing equity shares in weight average cost of capital (WACC), in which the value of loan capital results from the fixed assumptions accepted in the financial plan (for example a schedule of loan repayment) and own equity is evaluated by means of a discount method. The described method causes that, regardless of whether cash flows are calculated as FCFF or FCFE, the result of the company valuation will be identical.
Subjects:weight average cost of capital
discount rate
free cash flow
company valuation
assessment of investment profitability
JEL:G31
G32
G39
Document Type:Article
Appears in Collections:e-Finanse: Financial Internet Quarterly

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