BA 3340 Lecture Notes - Lecture 99: User Friendly, Stock Trader, Investment
Document Summary
Market value of securi0es, which are not part of opera0ons. Market value of net interest bearing debt. Be dedicated and spend the 0me necessary to develop reliable forecasts. The person who subsequently is responsible for the acquired business. Two out of three acquisi0ons turn out not to be prodtable (for the acquirer) See p. 217-218 for the discounted cash >ows model from an equity perspec)ve. Unbiased drm es0mates: dcf is a theore0cal correct valua0on approach. Realis0c assump0ons: dcf is based on an assump0on that is rela0vely easy to cope: Cash surpluses are paid out as dividends or reinvested in projects with a net present value equal to zero . Not user friendly: it is 0me consuming. Not understandable output: may be dixcult to explain to laymen, dcf shows the distribu0on of value rather than the value crea0on. Is signals cash genera0ons that can ul0mately be paid out as dividends (suzers from the same problem as the dividend model)
