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.