Iterations in company valuation - EMCINSMED PLC

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dc.contributor.authorPatena, Wiktor
dc.date.accessioned2013-07-09T11:53:52Z
dc.date.available2013-07-09T11:53:52Z
dc.date.issued2010
dc.descriptionArtykuł dostępny również na stronie : http://www.e-finanse.com/artykuly_eng/164.pdfpl
dc.description.abstractDCF 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.identifier.citationThe Quarterly "e-Finanse" : finansowy kwartalnik internetowy, 2010, nr specjalny, s. 14-26pl
dc.identifier.issn1734-039X
dc.identifier.urihttp://hdl.handle.net/11199/320
dc.language.isoenpl
dc.rightsopen access
dc.subjectcompany valuationpl
dc.subjectDCFpl
dc.subjectiterationspl
dc.titleIterations in company valuation - EMCINSMED PLCpl
dc.typearticlepl

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