ABFM: Concepts and Practice · Part C: Valuation, Mergers and Acquisitions

Chapter 15: DCF valuation

Valuing a business from its future cash: FCFF and FCFE, the discount rate, terminal value, equity value and dividend models.

Open Chapter 15 in the e-book The book and its prices

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

15.1Free cash flowsp. 199
15.2The discount ratep. 200
15.3Terminal valuep. 201
15.4Worked: from cash flows to value per sharep. 202
15.5Dividend discount modelsp. 203
Exam traps and quick checksp. 204
Practice: 16 questions in three roundsp. 205
Answers, with every wrong option explainedp. 207
Make it stickp. 209
Chapter 15 on one pagep. 210

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.