What is it about?
The paper shows which alternatives exist for consistent discounted cash flow valuation (DCF). It also helps to separate inconsistent from consistent approaches.
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Why is it important?
The paper helps to avoid valuation errors by using wrong cash flows or wrong cost of capital. It also shows that the value additivity principle is the key.
Perspectives
I have enjoyed working on this paper because I like to start with an economic core principle like value additivity and derive conclusions that are helpful for the theory and practice of valuation. Hopefully, others consider these conclusions to be helpful, too.
Professor Andreas Schüler
Universitaet der Bundeswehr Muenchen
Read the Original
This page is a summary of: A Tool Kit for Discounted Cash Flow Valuation: Consistent and Inconsistent Ways to Value Risky Cash Flows, Journal of Business Valuation and Economic Loss Analysis, December 2017, De Gruyter,
DOI: 10.1515/jbvela-2016-0012.
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