The Intrinsic Value of an Enterprise Determined by Means of the FCFE Tool

Veronika Jezkova, Zuzana Rowland, Veronika Machova and Jan Hejda
Additional contact information
Veronika Jezkova: Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic
Zuzana Rowland: Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic
Veronika Machova: Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic
Jan Hejda: Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic

Sustainability, 2020, vol. 12, issue 21, 1-13

Abstract: This paper deals with the determination of the intrinsic value of the company Seznam.cz, a.s. using discounted cash flow. Specifically, it is concerned with determining the value of the business from the perspective of the company’s shareholders. The Free Cash Flow to Equity (FCFE) method is chosen for analysis and determination of the value. According to this method, the specific FCFE values are discovered. However, the enterprise value must also be analyzed on the basis of other key indicators, such as financial leverage, the Capital Asset Pricing Model (CAPM) method, or the net present and future value of the FCFE. This is especially important so that the results can be put into mutual relations and a sufficient representative value of the FCFE results can be achieved. Input values stem from the company’s annual reports. From the results of the mentioned methods and indicators, it was found that the value of the FCFE is quite high, which means that the capital used is used appropriately. Based on the result of the continuing value of the FCFE, it can be said that the company’s intrinsic value is at a very good level.

Keywords: company’s intrinsic value; free cash flow; financial leverage; CAPM; FCFE (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/21/8868/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/21/8868/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:21:p:8868-:d:434670

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().