Advanced Search
MyIDEAS: Login to save this article or follow this journal

Expected Inflation and the Constant-Growth Valuation Model

Contents:

Author Info

  • Michael Bradley
  • Gregg A. Jarrell

Abstract

In the presence of inflation, the standard Constant-Growth valuation model found throughout the finance literature is not valid in cases where a company either (1) makes no net new investments or (2) invests only in zero Net Present Value projects. If expected inflation is positive, the generally accepted and widely used expression for the value of the firm under either of these two conditions seriously understates the true value of the firm, even with modest levels of inflation. Copyright (c) 2008 Morgan Stanley.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1745-6622.2008.00181.x
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Morgan Stanley in its journal Journal of Applied Corporate Finance.

Volume (Year): 20 (2008)
Issue (Month): 2 ()
Pages: 66-78

as in new window
Handle: RePEc:bla:jacrfn:v:20:y:2008:i:2:p:66-78

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1078-1196

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=1078-1196

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

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

Cited by:
  1. Jennergren, L. Peter, 2011. "The Conventional Formula for the Nominal Growth Rate of Free Cash Flows is OK -- A Comment on Three Recent Papers in the Journal of Applied Corporate Finance," Working Paper Series in Business Administration 2011:6, Stockholm School of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:jacrfn:v:20:y:2008:i:2:p:66-78. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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