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The Intrinsic Value of an Enterprise Determined by Means of the FCFE Tool

Author

Listed:
  • Veronika Jezkova

    (Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic)

  • Zuzana Rowland

    (Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic)

  • Veronika Machova

    (Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic)

  • Jan Hejda

    (Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic)

Abstract

This paper deals with the determination of the intrinsic value of the company Seznam.cz, a.s. using discounted cash flow. Specifically, it is concerned with determining the value of the business from the perspective of the company’s shareholders. The Free Cash Flow to Equity (FCFE) method is chosen for analysis and determination of the value. According to this method, the specific FCFE values are discovered. However, the enterprise value must also be analyzed on the basis of other key indicators, such as financial leverage, the Capital Asset Pricing Model (CAPM) method, or the net present and future value of the FCFE. This is especially important so that the results can be put into mutual relations and a sufficient representative value of the FCFE results can be achieved. Input values stem from the company’s annual reports. From the results of the mentioned methods and indicators, it was found that the value of the FCFE is quite high, which means that the capital used is used appropriately. Based on the result of the continuing value of the FCFE, it can be said that the company’s intrinsic value is at a very good level.

Suggested Citation

  • Veronika Jezkova & Zuzana Rowland & Veronika Machova & Jan Hejda, 2020. "The Intrinsic Value of an Enterprise Determined by Means of the FCFE Tool," Sustainability, MDPI, vol. 12(21), pages 1-13, October.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:21:p:8868-:d:434670
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