R. G. Ibragimov. Economic Appraisal of Managerial Decisions: Consistency of Valuation Model
V.5, N3, 2007
The evaluation of the expected economic returns via financial models is an integral part of the decision6making. We investigate potential sources of errors when applying discounted cash flow model under target leverage assumption and propose modifications to the model, so that consistency could be achieved between the valuation procedure, initial data and underlying assumptions of the forecast.