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A Practical Guide for Consistency in Valuation: Cash Flows, Terminal Value and Cost of Capital

Author

Listed:
  • Ignacio Vélez-Pareja

    (Politécnico Grancolombiano.)

  • Antonio Burbano-Pérez

    (Universidad de los Andes. Colombia.)

Abstract

El modelo de Sandmo (1971) para la empresa competitiva bajo incertidumbre en el precio ha sido objeto de investigación desde su aparición en 1971, en parte por el hecho de que se hayan identificado tres enfoques diferentes para señalar el efecto marginal de riesgo. Uno de estos enfoques ha generado nuevas investigaciones en lo que denominamos modelo en dos fases. El presente artículo pone en relación el modelo de Sandmo para la empresa competitiva con el área de los modelos en dos fases. Concretamente, aquí examinamos cómo el modelo de Sandmo puede adaptarse al contexto de un modelo en dos fases. De este modo, ofrecemos una generalización de un desconocido modelo de Sakai (1997).

Suggested Citation

  • Ignacio Vélez-Pareja & Antonio Burbano-Pérez, 2006. "A Practical Guide for Consistency in Valuation: Cash Flows, Terminal Value and Cost of Capital," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 5, pages 1-16, June.
    • Handle: RePEc:eac:articl:07/05
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    References listed on IDEAS

    as
    1. Ignacio Vélez-Pareja & Joseph Tham, 2006. "An Embarrassment of Riches: Winning Ways to Value with the WACC," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 5, pages 1-23, February.
    2. Tham, Joseph & Velez-Pareja, Ignacio, 2004. "Principles of Cash Flow Valuation," Elsevier Monographs, Elsevier, edition 1, number 9780126860405.
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    Cited by:

    1. Ignacio Vélez-Pareja, 2007. "Cash Flow Valuation in an Inflactionary World. The Case of World Bank for Regulated Firms," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 6, pages 1-19, November.

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    More about this item

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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