Iterations in company valuation - EMCINSMED PLC

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Show simple item record Patena, Wiktor 2013-07-09T11:53:52Z 2013-07-09T11:53:52Z 2010
dc.identifier.citation The Quarterly "e-Finanse" : finansowy kwartalnik internetowy, 2010, nr specjalny, s. 14-26 pl
dc.identifier.issn 1734-039X
dc.description Artykuł dostępny również na stronie : pl
dc.description.abstract DCF is the most respected method of company valuation. However, it does have a flaw related to the fact that the weights (share of debt and equity in total financing) that are used are based on book values. The problem may be overcome by using a technique based on iterations. In a real-life case, when one has to deal with numerous parameters and time periods, a numerical solution seems to be the only feasible approach. It is a chain of formulae that becomes so integrated that the information between cash flows and cost of capital moves freely. Loops run along columns (from V to WACC, and from E to k) and lines (from one year to another). The cost of capital “tracks” the capital structure and changes accordingly. The valuation is recursive, going backwards in time. In general, the recursive method of company evaluation overcomes a fundamental problem that is often ignored by many other methods: the fact that the cost of capital depends on the financial structure. Here in the paper, the valuation of Emcinsmed S.A. company is done in order to present the i-DCF valuation method. The company is highly leveraged, hence it serves as a good example. pl
dc.language.iso en pl
dc.rights open access
dc.subject company valuation pl
dc.subject DCF pl
dc.subject iterations pl
dc.title Iterations in company valuation - EMCINSMED PLC pl
dc.type article pl

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