A Simple Free Cash Flow Valuation Model Harvard Case Solution & Analysis

An easy model is presented that reveals the effect on value of the leverage ratio, the degree of profitability, the growth rate of revenue, the asset strength ratio, along with changing assumptions about the appropriate discount rate. This supports students to handle some of the ensuing dilemmas: 1) what is the definition of cash flow? 2) What impacts does change in the discount rate have on valuation? 3) How sensitive is worth to changes in assumptions about the fundamental features of the income flow? 4) How does escalation affect value? 5) How can the use of leverage affect value? 6) What are price-to-earnings ratios? and 7) What variables change price-to-earnings ratios?

PUBLICATION DATE: August 29, 2013 PRODUCT #: 814027-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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