Stochastic Discounted Cash Flow : : A Theory of the Valuation of Firms.

• Superior document: Springer Texts in Business and Economics Series
• Author: Kruschwitz, Lutz.
• TeilnehmendeR: Löffler, Andreas.
• Place / Publishing House: Cham : : Springer International Publishing AG,, 2020.; ©2020.
• Year of Publication: 2020
• Edition: 1st ed.
• Language: English
• Series: Springer Texts in Business and Economics Series
• Physical Description: 1 online resource (256 pages)

Table of Contents

Intro -- Preface -- Acknowledgements -- Contents -- List of Figures -- List of Symbols -- List of Definitions -- List of Theorems -- List of Assumptions -- List of Rules -- 1 Introduction: A Stochastic Approach to Discounted Cash Flow -- Reference -- 2 Basic Elements: Cash Flow, Tax, Expectation, Cost of Capital, Value -- 2.1 Fundamental Terms -- 2.1.1 Cash Flows -- 2.1.2 Taxes -- 2.1.3 Cost of Capital -- 2.1.4 Time -- 2.1.5 Problems -- 2.2 Conditional Expectation -- 2.2.1 Uncertainty and Information -- 2.2.2 Rules -- 2.2.3 Example -- 2.2.4 Problems -- 2.3 A First Glance at Business Values -- 2.3.1 Valuation Concept -- 2.3.2 Cost of Capital as Conditional Expected Returns -- 2.3.3 A First Valuation Equation -- 2.3.4 Fundamental Theorem of Asset Pricing -- 2.3.5 Transversality and Infinite Life Span -- 2.3.6 Problems -- 2.4 Further Literature -- References -- 3 Corporate Income Tax: WACC, FTE, TCF, APV -- 3.1 Unlevered Firms -- 3.1.1 Valuation Equation -- 3.1.2 Weak Auto-Regressive Cash Flows -- 3.1.3 Example (Continued) -- 3.1.4 Problems -- 3.2 Basics About Levered Firms -- 3.2.1 Equity and Debt -- 3.2.2 Earnings and Taxes -- 3.2.3 Financing Policies -- 3.2.4 Debt and Transversality (Again) -- 3.2.5 Default -- 3.2.6 Example (Finite Case Continued) -- 3.2.7 Problems -- 3.3 Autonomous Financing -- 3.3.1 Adjusted Present Value (APV) -- 3.3.2 Example (Continued) -- 3.3.3 Problems -- 3.4 Financing Based on Market Values -- 3.4.1 Flow to Equity (FTE) -- 3.4.2 Total Cash Flow (TCF) -- 3.4.3 Weighted Average Cost of Capital (WACC) -- 3.4.4 Miles-Ezzell- and Modigliani-Miller Adjustments -- 3.4.5 Over-Indebtedness and Illiquidity with Financing Based on Market Values -- 3.4.6 Example (Continued) -- 3.4.7 Problems -- 3.5 Financing Based on Book Values -- 3.5.1 Assumptions -- 3.5.2 Full Distribution Policy -- 3.5.3 Replacement Investments.

3.5.4 Investment Policy Based on Cash Flows -- 3.5.5 Example (Continued) -- 3.5.6 Problems -- 3.6 Other Financing Policies -- 3.6.1 Financing Based on Cash Flows -- 3.6.2 Financing Based on Dividends -- 3.6.3 Financing Based on Debt-Cash Flow Ratio -- 3.6.4 Comparing Alternative Forms of Financing -- 3.6.5 Problems -- 3.7 Further Literature -- References -- 4 Personal Income Tax -- 4.1 Unlevered and Levered Firms -- 4.1.1 ``Leverage'' Interpreted Anew -- 4.1.2 The Unlevered Firm -- 4.1.3 Income and Taxes -- 4.1.4 Fundamental Theorem -- 4.1.5 Tax Shield and Distribution Policy -- 4.1.6 Example (Continued) -- 4.1.7 Problems -- 4.2 Excursus: Cost of Equity and Tax Rate -- 4.2.1 Problems -- 4.3 Retention Policies -- 4.3.1 Autonomous Retention -- 4.3.2 Retention Based on Cash Flow -- 4.3.3 Retention Based on Dividends -- 4.3.4 Retention Based on Market Value -- 4.3.5 Problems -- 4.4 Further Literature -- References -- 5 Corporate and Personal Income Tax -- 5.1 Assumptions -- 5.2 Identification and Evaluation of Tax Advantages -- 5.3 Conclusion -- 5.4 Problem(s) -- References -- 6 Proofs -- 6.1 Williams/Gordon-Shapiro Formula (Theorem 3.2) and Equivalence of Valuation Concepts (Theorem 3.3) -- 6.2 Valuation Formula with Investment Policy Based on Cash Flows (Theorem 3.21) -- 6.3 Adjusted Modigliani-Miller Formula (Theorem 3.22) -- 6.4 Valuation Formula with Financing Based on Cash Flows (Theorems 3.23 and 3.24) -- 6.5 Valuation with Financing Based on Dividends (Theorem 3.25) -- 6.6 Valuation with Debt-Cash Flow Ratio (Theorems 3.26 and 3.27) -- 6.7 Fundamental Theorem with Income Tax (Theorem 4.2) -- 6.8 Valuation Formula with Retention Based on Dividends (Theorem 4.9) -- References -- 7 Sketch of Solutions -- 7.1 Basic Elements -- 7.1.1 Fundamental Terms -- 7.1.2 Conditional Expectation -- 7.1.3 A First Glance at Business Values.

7.2 Corporate Income Tax -- 7.2.1 Unlevered Firms -- 7.2.1.1 Basics About Levered Firms -- 7.2.2 Autonomous Financing -- 7.2.3 Financing Based on Market Values -- 7.2.4 Financing Based on Book Values -- 7.2.5 Other Financing Policies -- 7.3 Personal Income Tax -- 7.3.1 Unlevered and Levered Firms -- 7.3.2 Excursus: Cost of Equity and Tax Rate -- 7.3.3 Retention Policies -- 7.4 Corporate and Personal Income Tax -- Index.