Wednesday, March 4, 2009

Tuesday Musings

In class today my students and I explored the world of FCF (Free Cash Flow) models. It was fun to see them come to the realization that the HV i.e. TV (Horizon Value aka Terminal Value aka Continuing Value) is essentially based upon the Gordon Growth Model where value of equity = (expected dividend/price of stock) + estimated growth.

Is a company simply an ATM machine?

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