Using APV: a better tool for valuing operations
One of the most disseminated ways of valuing operating assets is discounted Cash flow, or DCF. But weighted average cost of capital, or WACC - one of the most commonly accepted forms of DCF - has become obsolete. This article discusses an alternative to WACC known as adjusted present value, or APV....
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2007 |
| País: | Brasil |
| Institución: | Fundação Getulio Vargas (FGV) |
| Repositorio: | Revista de Administração de Empresas |
| Idioma: | portugués |
| OAI Identifier: | oai:ojs.periodicos.fgv.br:article/36933 |
| Acceso en línea: | https://periodicos.fgv.br/rae/article/view/36933 |
| Access Level: | acceso abierto |
| Palabra clave: | Real options asset valuing discounted cash-flow weighted-average cost of capital adjusted present value Opções reais avaliação de ativos fluxo de caixa descontado custo médio ponderado de capital valor presente ajustado |
| Sumario: | One of the most disseminated ways of valuing operating assets is discounted Cash flow, or DCF. But weighted average cost of capital, or WACC - one of the most commonly accepted forms of DCF - has become obsolete. This article discusses an alternative to WACC known as adjusted present value, or APV. The article shows that this new methodology is greatly superior to WACC, due specially to the fact that it provides additional managerially relevant information at lower error levels, helping executives determine not only how much an asset is worth, but also where its value comes from. |
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