DISCOUNTED CASH FLOW METHOD FOR FIRM VALUATION WITH AN APPLICATION ON A FIRM

Abstract

The purpose of this article is to describe the general framework of discounted cash flow methods (The free cash flow to firm method and free cash flow to equity method), as a firm valuation method with an application on a firm. The Free Cash Flow projections have been established on the basis of the estimates made by assumptions and financial analysis data on the sample taken for the study and the calculation of the company value based on the Free Cash Flow to firm method has been carried out by fully defining the implementation steps. Careful examination of the presumptions used, as well as the firm value determined in the valuation studies using the discounted cash flow method, will be one of the most significant steps leading to the right decision