FIRM VALUATION CONCEPT AND DISCOUNTED CASH FLOW METHOD: A COMPARISON OF STOCK MARKETS

Esref Basci

Annals of Spiru Haret University, Economic Series, 2019, vol. 19, issue 2, 51-60

Abstract: Company (or firm) valuation – an evaluation process of a company to appreciate the value of a company’s right in this company or business. There are two objective and subjective aspects of value. The subjective value is the value determined by individuals and desires. For example, it is a subjective decision that the investor assesses the competitor over the normal to be monopoly in the market. The objective value is the value determined by the cost and benefits of the goods and services. Although there are many performance measures that measure company success, none is as comprehensive as value. There is a strong and linear relationship between a company’s market value and its discounted cash flows. Because earnings are used to generate the income statement, they cannot be used to measure cash flows.

Keywords: firm valuation; discounted cash flow; comparison of stock markets (search for similar items in EconPapers)
JEL-codes: G10 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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