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Value of the company free cash flows

AAnton10y ago
Good day! I am a bit confused how to calculate company value based on free cash flows. Often it is required to come to reasonable share price. BPP study book says that I need to discount free cash flows using WACC and then substract from resulting NPV debt value. However, in the answer to 6/13 50 marker they do not substract debt to come to company value-just assume that NPV gives company value. Can you please clarify.
John MoffatJohn MoffatTutor10y ago#1
The NPV gives the overall value of the company. Subtracting the value of the debt from it gives the value of the equity in the company.
AAnton10y ago#2
Simple as that. thanks!
John MoffatJohn MoffatTutor10y ago#3
You are welcome :-)
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