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Firm Valuation Concept And Discounted Cash Flow Method: A Comparison Of Stock Markets

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  • BAŞCI, Esref Savaş

    (Hitit University, Faculty of Economics and Administrative Sciences, Banking and Finance Department, Kuzey Kampüsü, Çevre Yolu Blv)

Abstract

Company (or firm) valuation – an evaluation process of a company to appreciate the value of a company’s right in this company or business. There are two objective and subjective aspects of value. The subjective value is the value determined by individuals and desires. For example, it is a subjective decision that the investor assesses the competitor over the normal to be monopoly in the market. The objective value is the value determined by the cost and benefits of the goods and services. Although there are many performance measures that measure company success, none is as comprehensive as value. There is a strong and linear relationship between a company’s market value and its discounted cash flows. Because earnings are used to generate the income statement, they cannot be used to measure cash flows.

Suggested Citation

  • BAŞCI, Esref Savaş, 2019. "Firm Valuation Concept And Discounted Cash Flow Method: A Comparison Of Stock Markets," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 19(2), pages 51-60.
    • Handle: RePEc:ris:sphecs:0322
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    Cited by:

    1. Richard Yeaw Chong Seow, 2023. "Comparative Financial Performance and Firm Valuation Analysis: A Malaysian Logistics Service Provider Case Study," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(7), pages 594-613, July.

    More about this item

    Keywords

    firm valuation; discounted cash flow; comparison of stock markets;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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