Business Valuation Models A critical analysis

This paper will present evidence of the major trends in business valuation by the DCF (Discounted Cash Flow) method and summarize the effects on the FCF (Free Cash Flow). It considers the "working papers" of Professor Pablo Fernandez PhD of IESE Business School, Dr. Guillermo Lopez Dumrauf and Dr. Marcelo A. Delfino. The valuation of an asset, project or an entire company can be done following different approaches, one of which is the method of discounted cash flow (DCF). This paper highlights the differences between the estimates of cash flow streams most used in Business Valuation, valuing, free cash flow (FCF), capital cash flow (CCF) and equity cash flow (ECF). By discounting and using the appropriate rate for each method of assessment, this work argues that the DCF method is the most appropriate as it shows a greater simplicity in calculations..