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To date, despite the existence of the sustainability goals of the 2030 Agenda and the need for an energy transition, the results set is still quite far away from being achieved. The awareness of this situation moves many European countries to promote policies based on the use of renewable sources. This paper is aimed at illustrating the Italian legislative context, evaluating the effectiveness of the introduced incentives, according to parameters that affect the productivity of a photovoltaic system. It is also aimed at helping to bridge the gap linked to the relationship between incentives and energy transition, also with regard to renewables. The research focuses on an evaluation methodology, based on technical and economic standards and it is accompanied by a case-study. In order to analyze the productivity of the photovoltaic system, all the main input factors that could affect the technical and economic performance of the system were investigated. In particular, solar potential analysis, shading elements, installation place, azimuth, tilt of modules and technology. For the economic valuations, the discounted cash flow method was used. The results obtained show that some Italian regions, particularly those in the north, should prefer other forms of renewables, such as hydroelectric and geothermal, and that the FER1 decree is not suitable for the promotion of solar photovoltaics in some areas. The research shows also that policies on renewables should be calibrated according to the intrinsic features of the place where they are located and have to be related to the built heritage they will interface, in the light of technological and plant system aspects. [ABSTRACT FROM AUTHOR]

Recent international arbitration cases, especially P&ID v Nigeria , have highlighted how easy it is for claimants—whether in treaty-based Investor–State Dispute Settlement or commercial arbitration—to advance immense claims grounded on essentially no evidence against state respondents. This largely reflects the readiness of many quantum experts to engage in the practice which Martin Wachs called 'lying with numbers' in order to misrepresent the execution risks of speculative unbuilt projects in a manner that is radically at odds with empirical data regarding such execution risks, which is exacerbated by the ignorance of many arbitrators about business economics and discounted cash flow valuation. This situation is unlikely to improve, and overall standards of candour in valuation in international arbitration will keep going down as the system will keep rewarding the act of cloaking advocacy in the guise of scientific or technical rationality in order to 'lie with numbers'. [ABSTRACT FROM AUTHOR]

According to its advocates, integrated reporting (IR) aims to enhance firms' information environment by placing financial reporting into a much broader perspective in which interrelated non‐financial information of firms' activities are taken into consideration. We examine whether this intended outcome of IR embeds into the stock pricing process using a sample of South African listed firms that mandatorily adopted IR in 2011. Unlike previous studies that explore market valuation implications of IR, we examine the channel through which the IR‐related information flows into firm value. Specifically, we quantify the effects of revisions of expectation about future cash flows (prompted by financial reporting information), revisions of expectation about discount rates (prompted by non‐financial reporting information) and their interconnectedness. We hypothesize and empirically show that the adoption of an IR approach prompted greater market revisions of expectations about future discount rates and a stronger interconnectedness between market revisions of expectations about future cash flows and discount rates. Thus, the change in the stock pricing process after the adoption of IR is determined by non‐financial reporting information and its strong interconnectedness with financial reporting information. We also show that our results are stronger for firms with greater earnings opacity, suggesting that investors find IR more useful when firms' financial reporting is opaque. Results indicate to researchers, practitioners and regulators that IR enhances the firm‐level information environment by providing informative non‐financial reporting which is also well integrated with financial reporting. [ABSTRACT FROM AUTHOR]

Copyright of Revista Foco (Interdisciplinary Studies Journal) is the property of Revista Foco and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Transport Trade Services (TTS) Group is the leading company that offers integrated logistics services on the Danube in Romania. The paper provides a pertinent image of the company, outlining several financial analysis indicators for the 2018-2022 period. The Discounted Cash Flow model and sensitivity analysis are two methods used to assess the intrinsic value of the company's stock price, the valuation resulting in a target price of 35.7 RON and a current price of 26.85 RON. With its listing on the Bucharest Stock Exchange, the company has experienced rapid growth and a sound financial health. TTS exhibits positive long-term prospects, consolidated through its increasing profitability and sustainable practices and projects. [ABSTRACT FROM AUTHOR]

Copyright of GeSec: Revista de Gestao e Secretariado is the property of Sindicato das Secretarias e Secretarios do Estado de Sao Paulo (SINSESP) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We investigate the importance of bankruptcy risk in discounted cash flow (DCF) equity valuation. Our analyses first show how bankruptcy risk is incorporated in DCF valuation, where investment risk is captured by cash flow certainty equivalents. Within this general setting, we find that bankruptcy risk can be captured by discounting factors incorporating period-specific bankruptcy probabilities, allowing the numerators in a DCF valuation model to follow a binary random walk. Elaborating a model of this kind, we assess the value of the equity holders' limited liability right (the equity holders' right to hand over the firm to its creditors if bankruptcy occurs). Two valuation models commonly used in academic research and professional practice—the Dividend Discount Model (DDM) and the Residual Income Valuation (RIV) model—are addressed specifically. Our analyses show that bankruptcy probabilities are important for the estimation of the value drivers in both models. Even if bankruptcy probabilities are as low as 0.02, equity values might be severely exaggerated if bankruptcy risk is ignored in DDM or RIV. In particular, this holds for firms expected to have high future growth (conditioned on firm survival). For the RIV model to properly capture bankruptcy risk, we identify "bankruptcy event accounting principles" and an additional term that must be included in the model. We also show that bankruptcy risk under certain conditions can be handled through a specific calibration of the discounting rate/-s in all DCF models, allowing the value drivers—i.e., future dividends or residual income—to be forecasted conditioned on firm survival. [ABSTRACT FROM AUTHOR]

The only source of revenue for mining is the sale of its reserves. Therefore, a particular quantity of reserves and a specific selling price will generate a certain income. However, these income determinants are very unpredictable. Theoretically, real options (RO) substitute the discounted cash flow (DCF) approach to account for this uncertainty. Generally, RO quantify the uncertainty particularly related to price volatility. However, owing to its mathematical intricacy and application, the utility of RO is minimal. In addition, historical data analysis cannot be applied for spatial uncertainty related to grade uncertainty. Conventional RO approaches, such as the Black–Scholes method and lattice valuation technique, cannot measure a project with multiple uncertainties. In addition, these methods are mathematically complex and not sufficiently flexible for practical adaptation. This study proposes originality on simulation technique called stratified state aggregation (SSA) development that combined price and grade uncertainties in estimating the value of mining projects. For case study, a tin mining project of PT Timah Tbk in Indonesia was undertaken, specifically for short-term mine planning in underwater mining operations at two mining locations. We utilized the historical data natural logarithmic analysis to determine price uncertainty and conditional simulation to evaluate grade uncertainty. Our results indicated that mining uncertainties might be modeled using RO and value-added through SSA can be used to assess multi-uncertainty and multi-stage mining (rainbow option). The SSA decision aligned with the DCF method with improvement in uncertainty assessment. In addition, incorporating management flexibility may aid in alleviating concerns regarding the continuation or termination of a project. [ABSTRACT FROM AUTHOR]

Objective: This text presents an in-depth analysis of the theoretical and practical aspects of the discounted cash flow method and its applicability in evaluation processes. Method: As it is a theoretical article, it draws on extensive literature and knowledge accumulated by the author over the years, much of it in undergraduate and postgraduate disciplines. Results or Discussion: After a thorough exploration of the two pillars of the method - the discount rate and the cash flow - it becomes evident that the main methods widely adopted in the literature offer consistent results, supported by solid theoretical foundations. I bring a critical discussion about three crucial aspects for the practical application of this method. The first aspect highlights the use of multiples, revealing how this approach can, in certain cases, introduce significant distortions in the evaluation results. Next, I address the issue of the capital cost of free cash flow, demonstrating the importance of calculating this metric on the correct basis, using market values, instead of relying on historical values. Finally, I explore how the method can be effectively used in the value creation process, highlighting how this capacity can be perceived through the method's generic expressions. Contributions: It is clear that, despite advances in research, there is still ample space in the literature for a more detailed and specific analysis of the challenges and opportunities associated with the use of discounted cash flow. This text reinforces the continued importance of this approach in the field of financial evaluation and highlights the need for constant improvement to guarantee solid and reliable results. [ABSTRACT FROM AUTHOR]

The construction industry has demonstrated resilience during the pandemic, becoming a global economic engine. Indonesia's PT Waskita Karya Tbk, a state-owned construction company, reported negative financial performance in its annual report, indicating a decline in revenues. As a public corporation, the company must maintain excellent financial performance and offer opportunities for shareholders. The movement of SOE's Construction shares with the code WSKT has also experienced a downward trend. Based on the dynamics of the business environment, the purpose of this research is to gain a deeper understanding of the Indonesian construction industry to identify Waskita Karya's challenges and opportunities. In addition, the study will determine the company's intrinsic and relative value if it defaults on its debts. The research will compute the company's value using the discounted cash flow (DCF) method and comparable companies. The study analyzes the impact of bond payment delays on Waskita Karya's financial performance, examining how these delays affect cash flow, liquidity, and overall financial health. The study focuses on the company stock valuation of PT. Waskita Karya Tbk and the impact caused by bond payment delays. The findings provide valuable insights for investors, stakeholders, and financial analysts, helping them make informed decisions about their investment in Waskita Karya's and better understand associated risks and opportunities. In conclusion, using the discounted cash flow analysis method, the implied value per share is IDR 550.22. Using the relative valuation method, the implied value of EV/Revenue per share is IDR 38 and EV/EBITDA per share is IDR 495, while the P/E and PBV values are IDR 625 and IDR 23, respectively. Delays in bond payments can negatively affect Waskita Karya's financial performance, causing liquidity constraints, increased interest expenses, and downgraded credit ratings. To mitigate these issues, Waskita must address delays, communicate effectively with stakeholders, and implement financial restructuration programs. Advising and partnering with experts is crucial for long-term success. [ABSTRACT FROM AUTHOR]

According to IVS 2023 the terminal value of a DCFA can be calculated in respect of the three fundamental appraisal approach: market, income and cost. Specifi- cally, "Where the asset is expected to continue beyond the explicit forecast period, valuers must estimate the value of the asset at the end of that period. The terminal value is then discounted back to the valuation date, normally using the same discount rate as applied to the forecast cash flow" (IVS 105 Valuation Approaches and Methods, para 50.20). Although academic and professional normally refer to direct capitalization to calculate the exit value (scrap value, going out value) different approaches are possible. In particular it is possible to calculate the exit value using the market approach. The present work starts from an original model of Discounted Cash Flow Analysis proposed by Simonotti (2006) to propose possible alternative to the original formula. The model proposed, as defined for the paper "Prudential Value DCFA Formula (PVF)" provides methodological alternatives to the original model in order to apply the method in different property market conditions allowing the appraiser to represent even property market in recovery or falling market phase, or prudential assessment of worth and opinion of value. In particular the proposed model replace the compound growth of the property value included in the traditional Simonotti's model, with a linear growth or even a combination of both. The paper emphasize how property valuation standards can not be considered as immutable but they may be considered in constant evolution. In delivering an opinion of value for mortgage lending purposes the approach of professional academician and real estate analyst need to be able to respond to change of external conditions, in consideration of the sustainability of the cash flows in the long term, for the entire duration of the loan (and therefore for the purpose of identifying the long-term sustainable value of the asset). The approach is functional, inter alia, for the purpose of identifying the "prudential value" as defined by the innovative banking regulation (Basel 3) according to the definition of loan-to-value (LTV) ratio for loan origination and monitoring. [ABSTRACT FROM AUTHOR]

Copyright of Financial Sciences / Nauki o Finansach is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Modern retail businesses in Indonesia are growing rapidly thanks to open market opportunities, manufacturing businesses that support product supply, and government support for economic growth through retail development. The purpose of this study is to determine the intrinsic value of shares of companies engaged in the food and staples retail sub-sector which in this case is represented by PT. Sumber Alfaria Trijaya, Tbk. (AMRT), PT. Diamond Food Indonesia, Tbk. (DMND), PT. Midi Utama Indonesia, Tbk. (MIDI), PT. Enseval Putera Megatrading, Tbk. (EPMT), and PT. Millenium Pharmacon Internatioanl, Tbk. (SDPC) listed on the Indonesia Stock Exchange (IDX). This research uses historical data for 2018-2022 which will be used as the basis for projections for 2023-2027. The results showed that by using the Discounted Cash Flow (DCF) method, specifically the Free Cash Flow to Firm (FCFF) approach, under an optimistic scenario, the intrinsic values of AMRT, SDPC, and DMND were undervalued. EPMT and MIDI stocks are overvalued. In the moderate scenario, the intrinsic values of AMRT, MIDI, EPMT, and DMND are overvalued, while SDPC is undervalued. Calculations on a pessimistic scenario, all companies studied are overvalued. In this study, the valuation of stocks was also conducted using the Relative Valuation (RV) method with the Price to Earnings Ratio (PER) and Price to Book Value (PBV) approaches. In an optimistic scenario, the stocks of AMRT, MIDI, and SDPC are considered expensive, while EPMT and DMND are seen cheap. In a moderat scenario, the stocks AMRT, EPMT, and SDPC are considered undervalued, while MIDI and DMND are seen expensive. In a pessimistic scenario, it is observed that AMRT, EPMT, and SDPC are undervalued, whereas MIDI and DMND are considered overvalued. This research aims to provide an objective assessment of the company, which investors can use to consider investments and by companies to enhance corporate value. [ABSTRACT FROM AUTHOR]

Using textual analysis for a large sample of analyst reports on U.S. firms, we find that analysts are more likely to use a discounted cash flow (DCF) model and to discuss more cash flow and discount rate information for firms with more uncertainty, as measured by earnings quality and firm risks. The market reactions to target price changes based on a DCF model are stronger, particularly for firms with greater valuation uncertainty and when the analysts present more cash flow and discount rate discussions. These results indicate that the analyst valuation process reflects investors' information demand under uncertainty and has a bearing on the informativeness of analyst research. [ABSTRACT FROM AUTHOR]

The objective of our paper is to analyze, how valuation practice deals with inflation especially for the terminal value, and how company value is influenced by assumptions set by practitioners. For that reason, we examine how vulnerable companies could be regarding struggles to pass on inflationary effects to their customers. We analyze the inflation rates assumed for the steady-state (terminal value) by comparing them to different estimators for the inflation rate expected at the valuation date (Survey of Professional Forecasters, inflation rates derived by comparing real and nominal rate of returns, inflation swaps). We quantify the implications of using different inflation rates for future cash flow development, terminal value and the company value at the valuation date, and compare nominal reported values with company values in a (hypothetical) world without inflation. Our sample consists of 263 valuation reports written by German auditors with valuation dates between 2000 to 2021. Most of the reports aim at determining the price per share to compensate minority shareholders during a squeeze-out. Our results question inter alia the preference for a constant company specific inflation rate of around 1% on average, and we quantify a number of value effects. [ABSTRACT FROM AUTHOR]

Authors have described selected problems related to valuation and value creation of Internet related companies. In case of intangible assets related to the new economy and Internet companies, valuation is usually much more complicated due to rapid volatility, limited historical information and constantly emerging new technologies that change the image of the market. The same situation is in case of young companies, which current, tangible assets are of little value, while the value of the company is concentrated in intangible assets and development options The paper presents general valuation indicators for Internet companies, which are a root point for a client division allowing a further model improvement. Based on the Internet companies evaluation indicators review, authors decided that for this proposal, the division between one-time (non-loyal) and repetitive (loyal) customers is of the greatest use. Following, the method of valuing companies based on valuation of Customer Lifetime Value was described. Considering different kinds of the Internet clients, a valuation model for one time and continuous relation was proposed. Authors suggest modifying traditional model by dividing the customers into two segments. The consumer's loyalty measured by behavioral outcome - the frequency of purchase is the criteria of segmentation. Such segmentation allows better extrapolation of company's value. [ABSTRACT FROM AUTHOR]

Purpose: The aim of this Education Briefing is to comment upon the construction and role of the capitalisation rate in the valuation of property assets and how the implicit assumptions of growth are market derived and may be considered more robust than the use of growth explicit discounted cash flow (DCF) models where explicit growth assumptions can be questioned. Design/methodology/approach: This Education Briefing will look at the role of analysing initial yields to derive market capitalisation rates, and it will look at component parts of the yield to isolate growth assumptions and compare property returns to the government bond market. Findings: Looking at the Maltese market, the briefing shows that the valuer needs to be aware of the advantages and disadvantages of implicit and explicit valuation models. Practical implications: The choice of valuation model is dependent upon the availability of suitable comparable information and the appropriateness of the model for the market in question. More transparent markets can benefit from the use of explicit models but where information is less available, such as the Maltese market, implicit models may be considered more robust at estimating market value. Originality/value: This is an Education Briefing discussing the construction and applicability of implicit valuation models using a market capitalisation rate. [ABSTRACT FROM AUTHOR]

Objective - This paper aims to examine the theoretical and practical aspects of the widely used discounted cash flow (DCF) valuation method. Methodology - The proposed method is probably the most widely used approach in the valuation of unlisted companies. It involves estimating the future cash flows that the company is expected to generate and discounting them to their present value using a discount rate. The study was conducted on Spanish olive oil companies between 2005 and 2020. Findings - Our results show that there are two values for valuing companies: static and dynamic values. Both values are calculated based on the sum of the updated cash value plus the remaining value. The static value provides only one value, while the dynamic value provides a range of values, resulting in a more accurate understanding of a company's value and a better comprehension of the risks associated with that value. Therefore, the company is considered a cash flow generator, and the value of the company is found by calculating the present value of these flows using an appropriate discount rate. Novelty - Despite this method being a powerful tool for evaluating companies, even in complex situations, the DCF method is subject to a significant assumption bias, and even slight changes in the underlying assumptions of the analysis can greatly alter the evaluation results. [ABSTRACT FROM AUTHOR]

Many industrial sectors were severely affected during the pandemic, which lasted from 2020 to 2021. Such indicators can be observed in various companies implementing efficiency measures ranging from cost reduction unrelated to revenue growth to layoff policies. Despite being under pressure due to the pandemic, many industrial subsectors experienced significant growth in the second quarter of 2021, according to statistics from the Ministry of Industry. This study aims to determine the fair value of shares in Industrial Goods companies listed on the Indonesia Stock Exchange. This approach uses a discounted cash flow (DCF) methodology with free cash flow to the company and relative valuation through price-to-earnings and price-to-book ratios. From 2017 to 2021, historical financial data was utilized to forecast future income and expenditure behavior in three scenarios: optimistic, moderate, and pessimistic. The results showed that the DCF-FCFF technique underestimated IMPC, ARNA, and UNTR. MARK is overvalued in pessimistic, moderate, and optimistic scenarios, while MARK is undervalued in optimistic scenarios. HEXA is overvalued in the pessimistic scenario but undervalued in the moderate and optimistic scenario. ARNA and UNTR were overvalued in all relative assessment scenarios using the PER approach, but MARK and HEXA were undervalued. IMPC is undervalued in a gloomy scenario and overpriced in a moderate and optimistic scenario. In all cases, the PBV method overestimates IMPC, ARNA, MARK, HEXA, and UNTR. The study implies that investors should conduct thorough due diligence before making investment decisions, considering company-specific factors and broader market conditions. Companies in the Industrial Goods sector must be ready to adapt to changing market dynamics and prioritize long-term value creation to attract and maintain investor confidence. [ABSTRACT FROM AUTHOR]

The financial valuation of power plants is an important instrument for investment planning. The environment of the energy sector, which is strongly influenced by renewable energies, is changing. The shift to decentralized supply has an impact on the technical complexity of the energy system and requires congestion management. In such a transitioning system, flexibility is gaining a more important function in the valuation of power plants. Existing valuation methods are examined as to how flexibility and marketing options are taken into account. The comparison of the existing valuation methods showed that the valuation results are strongly dependent on the method used and the technology investigated. There is a lack of validation of the methods through quantitative evaluation. [ABSTRACT FROM AUTHOR]

This case study examines the challenges faced in practice when determining equity value and share price for firms characterized by complexities including dilutive securities, equity investments, noncontrolling interests, leases, and underfunded pension plans. Coca-Cola Company is used as a case study to demonstrate how to accurately account for such items when deriving equity value and implied share price from enterprise value. [ABSTRACT FROM AUTHOR]

The degree of uncertainty associated with the value of a company plays a relevant role in valuation analysis. We propose an original and robust methodology for company market valuation, which replaces the traditional point estimate of the conventional Discounted Cash Flow model with a probability distribution of fair values that convey information about both the expected value of the company and its intrinsic uncertainty. Our methodology depends on two main ingredients: an econometric model for company revenues and a set of firm-specific balance sheet relations that are estimated using historical data. We explore the effectiveness and scope of our methodology through a series of statistical exercises on publicly traded U.S. companies. At the firm level, we show that the fair value distribution derived with our methodology constitutes a reliable predictor of the company's future abnormal returns. At the market level, we show that a long-short valuation (LSV) factor, built using buy-sell recommendations based on the fair value distribution, contains information not accessible through the traditional market factors. The LSV factor significantly increases the explanatory and the predictive power of factor models estimated on portfolios and individual stock returns. [ABSTRACT FROM AUTHOR]

Copyright of Brazilian Journal of Law & International Relations / Relações Internacionais no Mundo is the property of Relacoes Internacionais no Mundo and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

There is growing awareness that traditional valuation methods based on discounted cash flows using constant risk-adjusted discount rates struggle to account for climate-related risks when assessing long-term investments in physical assets and infrastructure. Worst yet, such methods fail to consider numerous financial benefits accruing from investment in resilience and adaptation, categorizing such expenditures as sunk costs that reduce investors' returns. Such traditional valuation methods encourage investors to postpone or forgo entirely investing in resilience and adaptation. The decoupled net present value (DNPV) method incorporates risk and risk-reduction measures into project valuations in clear and compelling financial terms. By quantifying both (i) risk exposures of assets to hazards and (ii) the reduction of such exposure through up-front investments, DNPV recasts the financial impact of risk-reduction measures. Thus, the benefits of risk-reducing investments such as adaptation and resilience can be fully valorized in project-level accounting, removing a significant barrier facing such investments today. [ABSTRACT FROM AUTHOR]

In order to optimize positioning and associated drug price for both payer and investor, it is for a company essential to forecast the potential market access attractiveness for the new drug for different indications at the early onset of the clinical development program. This analysis must include the constraints from the perspective of the payer, but also the biotech companies, who require a minimum drug price to satisfy their investors. This paper aims to provide an Integrated Valuation Model for payer and investor, bridging concepts from health economics and economic valuation reflecting the perspectives of the payer and the investor for a drug in early clinical development phase. The concept is illustrated for a new hypothetical drug (Product X) in advanced breast cancer in 1-line, 2-line, and 3-line position. The Integrated Valuation Model includes the outcomes of the budget impact model, pricing matrix model, and cost-effectiveness model reflecting the payer's perspective. These models are interacted and linked with a discounted cash flow model in order to reflect also the economic value from the investor's perspective. The maximum price in 1-line position is €269.7 for the payer and the minimum price is €14.7 for the investor, which are unit prices per administration corresponding with treatment regimens for the comparative treatments. In 2-line position, the maximum price is €274.1 for the payer and the minimum price for the investor increases to €184.5 for the investor because of the smaller market size in 2-line position, which leads to a smaller pricing corridor to satisfy both payer and investor. Consequently, Product X has market access attractiveness for both payer and investor in 1-line and 2-line position. However, the minimum price €942.7 in 3-line position for the investor is higher than the maximum price €283.3 for the payer, which means there is no market potential. The practical strategic application of the Integrated Valuation Model is optimization of positioning and price of Product X. Hence, it can be a transparent tool in early-stage development of a compound based on upfront assessment of market access attractiveness for the payer and the investor. [ABSTRACT FROM AUTHOR]

Copyright of Financing is the property of Financing and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Certifications related to sustainability in agribusiness are a crucial tool for promoting agricultural processes with a higher level of socio-environmental responsibility. However, their economic impact on small and medium-sized rural properties remains a topic of discussion. This research, with its comprehensive approach, aims to assess the economic potential generated by Bonsucro certification, an innovation process in sustainability. This process introduces pioneering evaluation criteria to meet the specific sustainability demands in the sugarcane sector on small and medium-sized properties. The approach was quantitative, using the Discounted Cash Flow method supported by Monte Carlo Simulation, where four scenarios were developed considering the small and medium producers without certification and with Bonsucro certification. The results obtained not only allow for obtaining the Economic Value of certified and non-certified producers but also for profiling the modal producer (who possesses traditional characteristics of the region), identifying convergence variables that are common characteristics among them and that impact land management, such as education, average age, investment capacity, among others. The findings demonstrate that small and medium-sized rural properties certified by Bonsucro create more economic-financial and sustainable value than uncertified rural properties. These findings can serve as a powerful motivator for private entities and associations of rural producers to implement certification, thereby empowering small and medium-sized rural producers to address relevant issues that have impacted the sustainability of sugarcane production, bringing significant results in terms of economic viability and socio-environmental impact. [ABSTRACT FROM AUTHOR]

Assigning a monetary value to a landscape improves its importance. It helps to realize the magnitude of the benefits that can be obtained and represents the basis for applying protection and improvement policies. As a case study, we considered Marina del Este, located on the Spanish Southern Mediterranean coast, characterized by the presence of protected natural areas of great value and a rugged coastline beautiful to sailors. This study applies the analytic multicriteria valuation method (AMUVAN) to estimate the landscape's economic contribution. This method combines the analytic hierarchy process and discounted cash flow analysis. A total of 16 participants were considered, all with knowledge about the marina, which included areas of the marina management, management organizations with competencies in the marina environment, commercial operation, and university professors. They weighted the importance of landscape concerning the rest of the marina activities, use versus non-use values, and the components of the total economic value (TEV) of the landscape within marinas as a natural asset. Results expressed that the landscape may reach a value of around 16.3 million euros. It represents more than 3000% of the value of the marina's profit and loss account. A detailed analysis of the components of the TEV makes it possible to propose strategies to improve the economic value of the landscape. [ABSTRACT FROM AUTHOR]

The contribution aims to estimate the quality of determining the general value of the selected company and to determine the most suitable model through the method of discounted cash flows. The general value of the enterprise is an expert's estimate of the most probable price of the assessed property on the day of the assessment at the given place and time. The quality of determining the general value of the enterprise is essentially related to the assessment of the actual situation in the enterprise, which includes obtaining and using funds, fluidity of financial flows, investing in other activities, the ability to repay foreign resources, planning and the current state of the enterprise. In the contribution, we focused on the quality of determining the general value of the company with an emphasis on the revenue potential. We carried out the valuation of the assets of the selected company in a two-phase process, which consisted of the calculation of free cash flows, the average weighted cost of capital, and the calculation of the company's value based on the parametric and Gordon formulas. When determining the general value of a company, it is also essential to consider whether the financial results of the company depend on economic deviations, and it is necessary to monitor the capital market, the development of interest rates on loans provided by banks, and the development of interest rates on government bonds. [ABSTRACT FROM AUTHOR]

Valuation experts have recommended using the finance formula equating real growth in net cash flows (g) to the plowback rate (k) times the real return on investment (r) as a more reasonable basis for estimating plowback in the steady‐state perpetuity period of the standard value‐driver DCF formula. Unfortunately, practitioners make two errors when estimating implied plowback as k = g ÷ r. The first error is to use the incorrect nominal formula k = G ÷ R that is still found in finance and valuation textbooks. The second error arises because there are two ways to define plowback in the value‐driver DCF model. The problematic traditional definition measures plowback ratio as a function of accounting NOPAT (before it has been transformed into cash NOPAT by deducting incremental working capital), thereby including in the numerator not only net new investment, but also changes in incremental working capital. The authors call this accounting plowback, and show why it is generally inappropriate to estimate implied accounting plowback using the formula k = g ÷ r. The authors explain in detail why the cash plowback presented in Bradley Jarrell (2008) is generally appropriate for estimating implied plowback and why accounting plowback is more problematic in this application. [ABSTRACT FROM AUTHOR]

The valuation of a technology or invention patent is an exercise of good sense based on referents of competitive intelligence and experts. The purpose of this article is to establish the monetary value of the invention patent according to the technology situation and under possible commercialization scenarios. First, the conditions and potential of the patent are evaluated through expert analysis, the expectations of the owners of the invention patent and of potential clients or allies. Second, the patent is valued by discounted free cash flow (FCLD) and according to possible commercialization alternatives. The results show that there is an increase in the added value of 2.7 times for the company, in the alternative corresponding to the licensing of energy distributors in the national territory, compared to the alternative of only producing internally and making its own distribution. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to establish the flow-to-equity method, the free cash flow (FCF) method, the adjusted present value method and the relationships between these methods when the FCF appears as an annuity. More specifically, we depart from the two most widely used evaluation settings. The first setting is that of Modigliani and Miller who based their analysis on a stationary FCF. The second setting is that of Miles and Ezzell who worked with an FCF that represents an autoregressive possess of first order. Design/methodology/approach: Inspired by recent observations in the literature concerning cash flows, discount rates and values in discounted cash flow (DCF) methods, we mathematically derive DCF valuation formulas for annuities. Findings: The following relationships are established: (a) the correct discount rate of the tax shield when the free cash flow takes the form of a first-order autoregressive annuity, (b) the direct valuation of the tax shield from the free cash flow for a first-order autoregressive annuity, (c) the correct translation from the required return on unlevered equity to the levered equity, when the free cash flow is a stationary annuity and (d) direct calculation of the unlevered and levered firm values and the value of the tax shield for a stationary annuity. Originality/value: Until now the complete set of formulas for the valuation of stochastic annuities by different DCF methods has not been established in the literature. These formulas are developed here. These formulas are important for practitioners and academics when it comes to the valuation of cash flows of finite lifetime. [ABSTRACT FROM AUTHOR]

This article focuses on the topic of the relative valuation from the perspective of non-publicly traded companies and the determination of industry multiples allowing the subsequent application of this approach to specific industries. I chose the Czech brewing industry as the target industry, represented by the 50 most important entities (covering more than 99% of the industry's turnover). Due to the fact that no market value data are available for this type of company, I first used an income valuation approach – the discounted cash flow (DCF) method to assess the market value of each company in the sample. I then quantified valuation multiples of P/E, EV/EBIT, EV/EBITDA, P/S, EV/S, P/BV, and EV/IC for each company, from which I determined industry statistics. I verified their suitability for use in the relative valuation approach and compared them with the results of existing studies on the most commonly used valuation approaches in the Czech Republic. Furthermore, I compared my own calculations of industry multiples for non-publicly traded companies with available data on industry multiples of publicly-traded companies in the brewing industry across Europe. The results of the comparison show that these multiples are on average lower for non-publicly traded companies than for listed companies. [ABSTRACT FROM AUTHOR]

The discounted cash flow ("DCF") model is widely used for valuing corporate assets. But valuable assets that do not generate cash flows will be missed by the DCF approach. Because cash interest income is generally not included in the projected net cash flows of operating assets, the value of cash is regarded as a non-operating asset whose value must be added to the DCF enterprise value. Unfortunately, it has become standard practice on Wall Street and for the courts to exclude some amount of cash from non-operating assets on the basis that it will be used to finance the immediate operations of the business. The exclusion of so-called "operating" or "working-capital" cash is widely accepted as necessary and is recommended in virtually all valuation texts and treatises. We disagree and show that all cash should generally be added as a non-operating asset, except in unique circumstances where "wasting cash" is not earning a fair market return. We explain that excluding operating cash is correct only if either the interest income on cash is included in the net cash flows projections used to compute DCF value, or if the specific (near-term) operating expenses that will be covered by operating cash are excluded from the net cash flow projections. In either case, the full economic benefits of owning operating cash are fully reflected in the DCF enterprise value of the company, causing the DCF value to be higher by the exact amount of operating cash that is excluded. We call this the symmetry principle of operating cash. In practice, neither condition is normally met, so that all cash should generally be treated as a non-operating asset. [ABSTRACT FROM AUTHOR]

This article aims to analyze the incorporation of Webjet by Gol, in 2011, from the perspective of the owners of each of the companies, considering the value of the transaction and the gains generated by synergies arising from the operation. The quantitative analysis used the discounted cash flow method to evaluate each companies' value vis-à-vis the amount of the transaction, and the Tobin's q, to verify if there was synergistic gain. The results indicated that (i) Webjet shareholders experienced wealth gain from the transaction and (ii) the transaction did not generate synergistic gains for Gol's shareholders. This article also contributes to the literature by expanding the knowledge applied to the airline incorporations, in addition to adding to the evidence that targeted companies are generally benefited by mergers and acquisitions even in the absence of synergistic gains. [ABSTRACT FROM AUTHOR]

Valuation is at the core of every investor decision, especially in times of uncertainty. In this paper the author moves from the outset of the COVID-19 pandemic when global markets were in turmoil, through the period when sentiment became clearer in the market and the role that this should play, how valuation methodology evolved as we entered into a period where investor activity returned with the wider economy going through periods of lockdown and restriction easing and then further periods of restrictions. We appear to be in an increasingly polarised marketplace and valuation methodology is increasingly important to ensure a consistent approach is taken. The pandemic has given valuers new tools and refocused the valuation community on how best to value in times of uncertainty — lessons learned that will remain relevant in the future. [ABSTRACT FROM AUTHOR]