Valuation

Preface

Value maximization is the primary objective of the existence of any firm. Value creation is fundamental for the existence of a firm from the perspective of all its stakeholder, which includes shareholders, employees, customers, suppliers, creditors, local community, state, and others. Value has different meanings in functional areas of management. Strategic management considers value chain as steps that a firm performs to provide value for customers. In finance, value is the firm value that consists of fundamental value and shareholder value. Fundamental value is based on the present value of expected free cash flows. Companies create value by means of investing capital at a higher rate of return when compared to its cost of capital. ...