This paper is a summarized compendium of all the methods
and theories on company valuation using discounted cash
flows. It illustrates ten methods: free cash flow,
equity cash flow, capital cash flow, APV (adjusted
present value), business's risk-free cash flow and
equity cash flow, risk-free rate-adjusted free cash flow
and equity cash flow, economic profit and EVA. All ten
methods always give the same value. This result is
logical, as all methods analyze the same reality under
the same hypotheses; they differ only in the cash flows
taken as the starting point for valuation. The
differences between the various theories for firm
valuation arise from the calculation of the value of the
tax shields. The paper analyses and illustrates nine
different theories of the calculation of the VTS; and
lists the most important valuation equations according
to each of these theories. pdf
