Abstract
PurposeThe aim of this paper is to answer the question: Do discounted cash flows valuation methods provide always the same value?Design/methodology/approachThis paper is a summarized compendium of ten methods including: free cash flow; equity cash flow; capital cash flow; adjusted present value; business's risk‐adjusted free cash flow and equity cash flow; risk‐free rate‐adjusted free cash flow and equity cash flow; economic profit; and economic value added.FindingsAll ten methods always give the same value.Research limitations/implicationsThe disagreements among the various theories of firm valuation arise from the calculation of the value of the tax shields (VTS). The paper analyses nine different theories.Originality/valueThe paper is an analysis of ten methods of company valuation using discounted cash flows and nine different theories about the VTS.
Subject
Business, Management and Accounting (miscellaneous),Finance
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