Publications [#302934] of Joseph Tham

We've launched a new site so please go to People & Research for current information on our faculty and staff.

search .

Other Working Papers

  1. Velez-Pareja, I; Tham, J. "The Mismatching of APV and the DCF in Brealey, Myers and Allen 8th Edition of Principles of Corporate Finance, 2006."   (September, 2006).
    (last updated on 2020/08/05)

    Abstract:
    In the latest edition of Principles of Corporate Finance (Brealey, Myers and Allen, 2006) the authors use a finite cash flow example to illustrate the valuation procedure for using the Discounted Cash Flow (DCF) method with the free cash flow (FCF) and the Adjusted Present Value (APV). The two firm values obtained are different. They say that the "... difference [...] is not a big deal considering all the lurking risks and pitfalls in forecasting [...] cash flows". In this teaching note we show that the two methods give identical values when the proper discount rates are used.

Joseph Tham