Show simple item record

Consistency in valuation: A practical guide

dc.creatorVélez-Pareja I.
dc.creatorBurbano-Pérez A.
dc.date.accessioned2020-03-26T16:33:00Z
dc.date.available2020-03-26T16:33:00Z
dc.date.issued2010
dc.identifier.citationAcademia Revista Latinoamericana de Administracion; Núm. 44; pp. 21-43
dc.identifier.issn1012-8255
dc.identifier.urihttps://hdl.handle.net/20.500.12585/9122
dc.description.abstractPractitioners and teachers easily break some consistency rules when conducting or teaching valuation of assets, which may lead to different results by different methods. In this short note we present a practical guide to call attention to the most frequently broken consistency rules. Firstly, they have to do with the consistency in matching of the cash flows. Secondly, with the proper expression for the cost of levered equity, and different formulations for the weighted average cost of capital, for finite cash flows. Thirdly, with the consistency between the terminal value and growth. In this article we deal with the first two, and leave any considerations about terminal value for a subsequent note, considering for now the terminal value as given. We show that, keeping this consistency, all methods lead to the same value. We illustrate this by a simple example. In the Appendices we show some algebraic derivations. © 2010 de Cladea.eng
dc.format.mediumRecurso electrónico
dc.format.mimetypeapplication/pdf
dc.language.isoeng
dc.publisherConsejo Latinoamericano de Escuelas de Administracion
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/
dc.sourcehttps://www.scopus.com/inward/record.uri?eid=2-s2.0-78649766714&partnerID=40&md5=867f243ae2025c06e7e1e24d3a9e3abd
dc.titleConsistency in valuation: A practical guide
dc.title.alternativeConsistencia en la valoración: Una guía práctica
dcterms.bibliographicCitationInselbag, I., Howard, K., Two DCF approaches for valuing companies under alternative financing strategies (and how to chose among them) (1997) Journal of Applied Corporate Finance, 10 (1), pp. 114-122
dcterms.bibliographicCitationMiles, J., Ezzell, J., The weighted average cost of capital, perfect capital markets and project life: A clarification (1980) Journal of Financial and Quantitative Analysis, 15 (3), pp. 719-730
dcterms.bibliographicCitationModigliani, F., Miller, M.H., The cost of capital, corporation taxes and the theory of investment (1958) The American Economic Review, 48, pp. 261-297
dcterms.bibliographicCitationModigliani, F., Miller, M.H., Corporate income taxes and the cost of capital: A correction (1963) The American Economic Review, 53, pp. 433-443
dcterms.bibliographicCitationTaggart Jr., R.A., Consistent valuation and cost of capital expressions with corporate and personal taxes (1991) Financial Management, Autumn, pp. 8-20. , Available as Consistent valuation and cost of capital expressions with corporate and personal taxes, at National Bureau of Economic Research, August, 1989
dcterms.bibliographicCitationTaggart Jr., R.A., Capital budget and the financing decisions: An exposition (1977) Financial Management, 6 (2), pp. 59-64
dcterms.bibliographicCitationTham, J., Vélez-Pareja, I., An embarrassment of riches: Winning ways to value with the WACC (2002) Working Paper in Social Science Research Network (SSRN)
dcterms.bibliographicCitationTham, J., Vélez-Pareja, I., (2004) Principles of cash flow valuation, , Academic Press
dcterms.bibliographicCitationVélez-Pareja, I., Cost of capital for non-trading firms (2003) In Spanish, in Academia, Revista Latinoamericana de Administración, Costo de capital para firmas no transadas en bolsa, 29, pp. 45-75. , Both versions are posted as working papers in SSRN
dcterms.bibliographicCitationVélez-Pareja, I., Tham, J., Market value calculation and the solution of circularity between value and the weighted average cost of capital in Revista de Administração Mackenzie (2009) Edição Temática Especial Jubileu de Ouro de Modigliani & Miller. Available as A Note on the Weighted Average Cost of Capital WACC, Working Paper in SSRN, 10 (6). , http://ssrn.com/abstract=254587, November-December, or doi:10.2139/ssrn.254587. In Spanish as Nota sobre el costo promedio de capital in SSRN, http://ssrn.com/abstract=279460 or doi:10.2139/ssrn.279460
dcterms.bibliographicCitationVélez-Pareja, I., Tham, J., Timanco S. A.: Impuestos por pagar, pérdidas amortizadas, deuda en divisas, renta presuntiva y ajustes por inflación (2003) Su tratamiento con Flujo de Caja Descontado y EVA©, , (Timanco S.A.: Unpaid Taxes, Losses Carried Forward, Foreign Debt, Presumptive Income and Adjustment for Inflation. The Treatment with DCF and EVA©), Working Paper in SSRN
datacite.rightshttp://purl.org/coar/access_right/c_16ec
oaire.resourceTypehttp://purl.org/coar/resource_type/c_6501
oaire.versionhttp://purl.org/coar/version/c_970fb48d4fbd8a85
dc.type.driverinfo:eu-repo/semantics/article
dc.type.hasversioninfo:eu-repo/semantics/publishedVersion
dc.subject.keywordsCash flows
dc.subject.keywordsLevered equity value
dc.subject.keywordsLevered value
dc.subject.keywordsValuation
dc.subject.keywordsWeighted average cost of capital
dc.rights.accessrightsinfo:eu-repo/semantics/restrictedAccess
dc.rights.ccAtribución-NoComercial 4.0 Internacional
dc.identifier.instnameUniversidad Tecnológica de Bolívar
dc.identifier.reponameRepositorio UTB
dc.type.spaArtículo
dc.identifier.orcid6503847935
dc.identifier.orcid36660567100


Files in this item

FilesSizeFormatView

There are no files associated with this item.

This item appears in the following Collection(s)

Show simple item record

http://creativecommons.org/licenses/by-nc-nd/4.0/
Except where otherwise noted, this item's license is described as http://creativecommons.org/licenses/by-nc-nd/4.0/

Universidad Tecnológica de Bolívar - 2017 Institución de Educación Superior sujeta a inspección y vigilancia por el Ministerio de Educación Nacional. Resolución No 961 del 26 de octubre de 1970 a través de la cual la Gobernación de Bolívar otorga la Personería Jurídica a la Universidad Tecnológica de Bolívar.