IDEAS home Printed from https://ideas.repec.org/b/eee/monogr/9780126860405.html
   My bibliography  Save this book

Principles of Cash Flow Valuation

Author

Listed:
  • Tham, Joseph

    (Visiting Assistant Professor, Duke Center for International Development(DCID), Sanford Institute of Public Policy, Duke University)

  • Velez-Pareja, Ignacio

    (Politécnico Grancolombiano, Bogotá, Colombia)

Abstract

Principles of Cash Flow Valuation is the only book available that focuses exclusively on cash flow valuation. This text provides a comprehensive and practical, market-based framework for the valuation of finite cash flows derived from a set of integrated financial statements, namely, the income statement, balance sheet, and cash budget. The authors have distilled the essence of years of gathering academic wisdom in the study of cash flow analysis and the cost of capital. Their work should go a long way toward bridging the gap between the application of cost benefit analysis and the theory of capital budgeting. This book covers the basic concepts in market-based cash flow valuation. Topics include the tme value of money (TVM) and an introduction to cost of capital; basic review of financial statements and accounting concepts; construction of integrated pro-forma financial statements; derivation of free cash flows; use of the WACC in theory and in practice; estimating the WACC for non traded firms; calculating the terminal value beyond the planning period. It also revisits the theory for cost of capital and explains how cash flows are valued in reality. The ideas are illustrated using examples and a case study. The presentation is appropriate for a range of technical backgrounds. This text will be of interest to finance professionals as well as MBA and other graduate students in finance. * Provides the only exclusive treatment of cash flow valuation * Authors use examples and a case study to illustrate ideas * Presentation appropriate for a range of technical backgrounds: ideas are presented clearly, full exposition is also provided * Named among the Top 10 financial engineering titles by Financial Engineering News

Suggested Citation

  • Tham, Joseph & Velez-Pareja, Ignacio, 2004. "Principles of Cash Flow Valuation," Elsevier Monographs, Elsevier, edition 1, number 9780126860405.
    • Handle: RePEc:eee:monogr:9780126860405
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/book/9780126860405
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vélez Pareja Ignacio, 2012. "Ranking and optimal selection of investments with internal rate of return and benefit-cost ratio: a revision," Contaduría y Administración, Accounting and Management, vol. 57(1), pages 29-51, enero-mar.
    2. Magni, Carlo Alberto, 2009. "Splitting up value: A critical review of residual income theories," European Journal of Operational Research, Elsevier, vol. 198(1), pages 1-22, October.
    3. Carlo Alberto Magni, 2023. "The Split-Screen Approach for Project Appraisal (Part I: The Theory)," JRFM, MDPI, vol. 16(3), pages 1-49, March.
    4. Dirk Beyer, 2018. "A matrix approach to valuation and performance measurement based on accounting information considering different financing policies," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(1), pages 37-61, March.
    5. 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.
    6. Ignacio Vélez-Pareja & Joseph Tham & Viviana Fernández, 2005. "Adjustment of the WACC with Subsidized Debt in the Presence of Corporate Taxes: The N-Period Case," 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. 4, pages 1-19, October.
    7. Vélez-Pareja, Ignacio & Magni, Carlo Alberto, 2008. "Potential dividends and actual cash flows. Theoretical and empirical reasons for using ‘actual’ and dismissing ‘potential’, Or: How not to pull potential rabbits out of actual hats," MPRA Paper 7266, University Library of Munich, Germany.
    8. Ignacio Vélez-Pareja & Rauf Ibragimov & Joseph Tham, 2008. "Constant Leverage And Constant Cost Of Capital: A Common Knowledge Half-Truth," Estudios Gerenciales, Universidad Icesi, June.
    9. Georgios Marinakos & Sophia Daskalaki & Theodoros Ntrinias, 2014. "Defensive financial decisions support for retailers in Greek pharmaceutical industry," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 22(3), pages 525-551, September.
    10. Magni, Carlo Alberto & Marchioni, Andrea & Baschieri, Davide, 2022. "Impact of financing and payout policy on the economic profitability of solar photovoltaic plants," International Journal of Production Economics, Elsevier, vol. 244(C).
    11. Sarmiento-Sabogal, Julio & Sadeghi, Mehdi, 2014. "Unlevered betas and the cost of equity capital: An empirical approach," The North American Journal of Economics and Finance, Elsevier, vol. 30(C), pages 90-105.
    12. Ignacio Velez-Pareja & Julian Benavides Franco, 2011. "Cost of Capital when Dividends are Deductible," Brazilian Review of Finance, Brazilian Society of Finance, vol. 9(3), pages 309-334.
    13. R. Ibragimov G. & G. Panferov A. & Р. Ибрагимов Г. & Г. Панферов А., 2014. "Обобщение Теории Модильяни-Миллера: Миф И Реальность // Generalization Of The Modigliani-Miller Theory: Myth And Reality," Финансы: теория и практика/Finance: Theory and Practice // Finance: Theory and Practice, ФГОБУВО Финансовый университет при Правительстве Российской Федерации // Financial University under The Government of Russian Federation, issue 3, pages 114-122.
    14. Magni, Carlo Alberto & Vélez-Pareja, Ignacio, 2009. "Potential dividends versus actual cash flows in firm valuation," MPRA Paper 14509, University Library of Munich, Germany.
    15. Samis, Michael & Davis, Graham A. & Laughton, David & Poulin, Richard, 2005. "Valuing uncertain asset cash flows when there are no options: A real options approach," Resources Policy, Elsevier, vol. 30(4), pages 285-298, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:monogr:9780126860405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.sciencedirect.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.