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Business valuation
5.3 Overview of methods
TWO ALTERNATIVE
METHODS
Forecast free cash flows to Forecast free cash flows to
equity (i.e. post-tax cash all investors (i.e. post-tax
flows AFTER financing cash flows BEFORE
charges) financing charges)
Discount using cost of
equity Discount using WACC
DEDUCT VALUE OF
DEBT
VALUE OF EQUITY
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