Master this deck with 19 terms through effective study methods.
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They assess the present value of expected future cash flows.
Free cash flows are available for distribution after necessary reinvestments.
It focuses on net cash inflows available to capital providers.
Estimating firm value for common equity shareholders.
When valuing the entire firm, not just equity.
The present value of future cash flows decreases.
Both can be used to value a firm from different perspectives.
It directly measures cash available for distribution.
Nominal cash flows do not account for inflation.
The period over which future cash flows are estimated.
Determined by the present value of expected future dividends.
Into operating and financial leverage components.
Operating or financing categories.
Cash flow from operations from the projected statement of cash flows.
Interest expense on financial liabilities, net of tax savings.
Interest income on those financial assets, net of taxes.
Multiply by one minus the firm’s marginal tax rate.
They are subtracted from cash flows.
It leads to variations in computed free cash flows.