Abstract
Correctly applying the valuation methodologies is important. Sabal (2007), using a well-designed example, shows that various methods give identical results, and asserts that APV is more convenient for the emerging market. However, a few issues are questionable which we intend to clarify, including (1) the evidence regarding target debt ratio; (2) the relationship between the WACC/APV and the capital structure; (3) the inconsistencies in the CCF application; and (4) why using the framework by Fernndez (2004) does not necessarily prove Sabal's assertion. Our study and Sabal's work are both integral parts in contributing to the better understanding of business valuation.
Original language | English (US) |
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Article number | 2 |
Journal | Journal of Business Valuation and Economic Loss Analysis |
Volume | 5 |
Issue number | 1 |
DOIs | |
State | Published - Apr 21 2010 |
Externally published | Yes |
Keywords
- APV
- CCF
- Capital structure
- WACC
ASJC Scopus subject areas
- Business and International Management
- Accounting
- Finance
- Economics and Econometrics
- Strategy and Management