basics of discounted cash flow valuation（贴现现金流估值的基础）.pdf

Basics of Discounted Cash Flow Basics of Discounted Cash Flow Valuation Valuation Aswath Damodaran 1 Discounted Cashflow Valuation: Basis for Discounted Cashflow Valuation: Basis for Approach Approach t = n CF Value = t t t =1 (1+ r) – where, – n = Life of the asset – CF = Cashflow in period t t – r = Discount rate reflecting the riskiness of the estimated cashflows 2 Equity Valuation versus Firm Valuation Equity Valuation versus Firm Valuation l Value just the equity stake in the business l Value the entire business, which includes, besides equity, the other claimholders in the firm 3 I.Equity Valuation I.Equity Valuation l The value of equity is obtained by discounting expected cashflows to equity, i.e., the residual cashflows after meeting all expenses, tax obligations and interest and principal payments, at the cost of equity, i.e., the rate of return required by equity investors in the firm. t=n CF to Equityt Value of Equity = t t=1 (1+ ke ) where, CF to Equity = Expected Cashflow to Equity in period t t k = Cost of Equity e l The dividend discount model is a specia