Capital Structure and Long-term Financing RWJ Chp 15. The Capital-Structure Question and The Pie Theory. The value of a firm is defined to be the sum of the value of the firm’s debt and the firm’s equity. V = B + S.

ByDiscounted Dividend Valuation. DCF Approaches. Dividends = cash paid to shareholders Free cash flow = cash available to pay shareholders Residual income = economic profit. Discounting Dividends. Advantages: Stable and predictable Theoretically justified Disadvantages:

ByChapter Fifteen. 15. Capital Structure: Basic Concepts. Corporate Finance Ross Westerfield Jaffe. Sixth Edition. Prepared by Gady Jacoby University of Manitoba and Sebouh Aintablian American University of Beirut. Chapter Outline.

ByView Perpetual cash flows PowerPoint (PPT) presentations online in SlideServe. SlideServe has a very huge collection of Perpetual cash flows PowerPoint presentations. You can view or download Perpetual cash flows presentations for your school assignment or business presentation. Browse for the presentations on every topic that you want.

Cash Flows. Cash Flow Information. Summarized by inflows and outflows into three key activities. Presenting Cash Flow Information. Two GAAP formats Direct method Indirect method Difference is how the cash flow from operations section is constructed

CASH FLOWS. By: Miss Siti Norhidayah Hamid. FRS 107. Cash Flow Statements requires a cash flow statement to be presented as integral (memenuhi) part of the financial statements for each period for which the financial statements are presented. FRS 107.

Cash Flows. Craig Ruff, Ph.D., CFA. Capital Budgeting Layout. Weighted Average Cost of Capital. Capital Budgeting Model. Decision. Appropriate Cash Flows. Capital Budgeting Layout. Cash Flows. Models. Payback Period. Now, we will cover the inputs to the models – the cash flows. NPV.

Free cash flows In discounted cash flow (DCF) valuation, we value an asset by discounting the future cash flows we expect to receive from that asset. Three common valuation techniques for valuing equity are: Dividend discount model (DDM)

Valuing Cash Flows. Non-Contingent Payments. Non-Contingent Payouts. Given an asset with fixed payments (i.e. independent of the state of the world), the asset’s price should equal the present value of the cash flows. Treasury Notes.

Valuing Cash Flows. Non-Contingent Payments. Non-Contingent Payouts. Given an asset with fixed payments (i.e. independent of the state of the world), the asset’s price should equal the present value of the cash flows. . Treasury Notes.

Estimating Cash Flows. DCF Valuation. Steps in Cash Flow Estimation. Estimate the current earnings of the firm If looking at cash flows to equity, look at earnings after interest expenses - i.e. net income If looking at cash flows to the firm, look at operating earnings after taxes

MEASURING CASH FLOWS. Measuring Cash Flows. Profits in the financial statements are calculated on “ accrual basis ” rather than “ cash basis ” (see next slide for accrual basis accounting). Thus, profits are not equal to cash. Accrual Basis Accounting.

Estimating Cash Flows. DCF Valuation. Steps in Cash Flow Estimation. Estimate the current earnings of the firm If looking at cash flows to equity, look at earnings after interest expenses - i.e. net income If looking at cash flows to the firm, look at operating earnings after taxes