Sanford School of Public Policy
Duke University
Publications of Joseph Tham :chronological alphabetical combined listing:
We've launched a new site so please go to People & Research for current information on our faculty and staff.
%% Books
@book{fds302943,
Author = {Tham, J and Velez-Pareja, I},
Title = {Principles of Cash Flow Valuation},
Publisher = {Academic press},
Year = {2004},
Month = {January},
ISBN = {978-0-12-686040-5},
Abstract = {Principles of Cash Flow Valuation is the only book available
that focuses exclusively on cash flow valuation. This text
provides a comprehensive and practical, market-based
framework for the valuation of finite cash flows derived
from a set of integrated financial statements, namely, the
income statement, balance sheet, and cash budget. The
authors have distilled the essence of years of gathering
academic wisdom in the study of cash flow analysis and the
cost of capital. Their work should go a long way toward
bridging the gap between the application of cost benefit
analysis and the theory of capital budgeting. This book
covers the basic concepts in market-based cash flow
valuation. Topics include the tme value of money (TVM) and
an introduction to cost of capital; basic review of
financial statements and accounting concepts; construction
of integrated pro-forma financial statements; derivation of
free cash flows; use of the WACC in theory and in practice;
estimating the WACC for non traded firms; calculating the
terminal value beyond the planning period. It also revisits
the theory for cost of capital and explains how cash flows
are valued in reality. The ideas are illustrated using
examples and a case study. The presentation is appropriate
for a range of technical backgrounds. This text will be of
interest to finance professionals as well as MBA and other
graduate students in finance. * Provides the only exclusive
treatment of cash flow valuation * Authors use examples and
a case study to illustrate ideas * Presentation appropriate
for a range of technical backgrounds: ideas are presented
clearly, full exposition is also provided * Named among the
Top 10 financial engineering titles by Financial Engineering
News},
Key = {fds302943}
}
%% Chapters in Books
@misc{fds302944,
Author = {Pareja, IV and Tham, J},
Title = {Capital Budgeting and Inflation},
Pages = {197-214},
Booktitle = {Capital Budgeting Valuation: Financial Analysis for Today's
Investment Projects},
Publisher = {JOHN WILEY & SONS INC},
Year = {2013},
Month = {May},
ISBN = {9780470569504},
url = {http://dx.doi.org/10.1002/9781118258422.ch11},
Doi = {10.1002/9781118258422.ch11},
Key = {fds302944}
}
%% Other Working Papers
@article{fds302922,
Author = {Tham, J and Velez-Pareja, I},
Title = {Top 9 (Unnecessary and Avoidable) Mistakes in Cash Flow
Valuation},
Year = {2019},
Month = {March},
Abstract = {In cash flow valuation (CFV), there are two main categories
of mistakes: derivation of the appropriate cash flows and
estimation of the cost of capital. A simple-minded view of
the world would suggest that with near perfect capital
markets, the presence of arbitrage would severely punish
wrong valuations and eradicate such mistakes in the
derivations of cash flows and estimations of the cost of
capital. Nonetheless, to the dismay of academics, such
mistakes continue to exist and thrive. It is not clear why
such mistakes persist in practice. In this paper we present
our list of the top nine mistakes in cash flow valuation. In
the age of the computer these mistakes are both unnecessary
and avoidable. In the usual triumph of hope over experience,
we are attempting to persuade analysts that they would
benefit from paying attention to these mistakes. Ultimately,
the (un)importance of the mistakes is an empirical question
and depends on the considered judgment of
practitioners.},
Key = {fds302922}
}
@article{fds302937,
Author = {Velez-Pareja, I and Tham, J},
Title = {The Tyranny of Rounding Errors: The Mismatching of APV and
the DCF in Perpetuities in Brealey and Myers 6th and 7th
Edition of Principles of Corporate Finance},
Year = {2008},
Month = {December},
Abstract = {In theory, different valuation methods, with consistent
assumptions, must give identical results. Numerical examples
that purport to illustrate the theory should demonstrate the
identical results. Unfortunately, in popular textbooks it is
all too easy to find numerical examples that are at odds
with the theory. There are several possible explanations for
the discrepancies. First, there might be some conceptual
confusion about the underlying assumptions. Second, it could
simply be "rounding errors." It is intellectual laziness to
ascribe the discrepancies to the tyranny of rounding errors
when in fact it is easy to show that rounding errors are not
the reasons for the discrepancies. It is common to read that
different valuation methods give different results. For
instance, Brealey and Myers (2000, 2003) say: "If the
company's debt ratio is constant over time, the
flow-to-equity method should give the same answer as
discounting company cash flows at the WACC and subtracting
debt." On the other hand, they say, "If financial leverage
will change significantly discounting flows to equity at
today's cost of equity will not give the right answer."
Inselbag and Kaufold, 1997, conclude that the APV is better
than the DCF when the debt schedule is given. This is
misleading in two senses: one, they mix methods because they
disregard the possibility to solve the circularity posed by
the relationship between value and discount rates and
second, as a consequence, they say that "one must already
have calculated the firm's value" in order to know the WACC.
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".
Once more, in this teaching note we show that the two
methods give identical values when the proper discount rates
are used.},
Key = {fds302937}
}
@article{fds302936,
Author = {Velez-Pareja, I and Tham, J},
Title = {Wacc, Value of Tax Savings and Terminal Value for Growing
and Non Growing Perpetuities},
Year = {2007},
Month = {October},
Abstract = {Although perpetuities are somewhat artificial in the sense
that in practice they do not exist, they are relevant
because no matter how detailed and complex a forecasted
financial plan for a firm or project could be terminal value
usually is calculated as perpetuity. This terminal value
might be a growing or a non growing perpetuity. On the other
hand, usually terminal value is a substantial part of the
firm value. In this note we examine in detail the proper
discount rate for cash flows in perpetuity, the present
value of tax savings and the calculation of terminal value.
The findings contradict what is generally accepted in the
literature.},
Key = {fds302936}
}
@article{fds302935,
Author = {Velez-Pareja, I and Ibragimov, R and Tham, J and Toro González,
D},
Title = {How the Regulator Overpays Investor? A Simple Exposition of
the Principles of Tariff Setting},
Year = {2007},
Month = {August},
Abstract = {In this teaching note, we discuss the basic principles for
tariff setting. Tariff setting is very important for
regulated industries, such as water and power. The tariff
should provide an appropriate risk-adjusted return to the
investor. If the tariff were too low, then the investors
would not be willing to invest. On the other hand, if the
tariff were too high, then it would reduce the consumers'
welfare. We examine the Rate of Return method for
calculating the tariff in a regulated firm. In the rate of
return method, the tariff compensates the investor for all
the costs that the investor incurs, including a fair return.
We use the discounted cash flow approach to value the return
that the investor receives. The results of both calculations
must be consistent. In particular, using simple examples, we
show that in the presence of a positive expected inflation
rate, the typical tariff calculation, Rate of return method,
is an overestimation of the required payment to the equity
holder.},
Key = {fds302935}
}
@article{fds302934,
Author = {Velez-Pareja, I and Tham, J},
Title = {The Mismatching of APV and the DCF in Brealey, Myers and
Allen 8th Edition of Principles of Corporate Finance,
2006},
Year = {2006},
Month = {September},
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.},
Key = {fds302934}
}
@article{fds302933,
Author = {Velez-Pareja, I and Tham, J},
Title = {Constant Leverage Modeling: A Reply to 'A Tutorial on the
McKinsey Model for Valuation of Companies'},
Year = {2006},
Month = {June},
Abstract = {In this note we analyze the tutorial based on the McKinsey
methodology for valuing companies. We have found that the
McKinsey methodology has one of the most common mistakes
mentioned in Tham and Vélez-Pareja (2004a and b): valuing
cash flows with a constant cost of capital when the leverage
is not constant. We calculate the proper firm and equity
values by assuming the free cash flow, FCF calculated in the
tutorial, and deriving the cash flow to equity, CFE. We
develop the proper calculations of firm and equity values
for constant leverage as well. For both calculations we
calculate the deviations from the values calculated in the
tutorial.},
Key = {fds302933}
}
@article{fds302932,
Author = {Velez-Pareja, I and Tham, J},
Title = {Valuation of Cash Flows with Constant Leverage: Further
Insights},
Year = {2006},
Month = {May},
Abstract = {It is widely known that if the leverage is constant over
time, then the cost of equity and the Weighted Average Cost
of Capital (WACC) for the free cash flow, FCF, is constant
over time. In other words, it is inappropriate to use a
constant WACCFCF to discount the free cash flow (FCF) if the
leverage changes over time and some conditions are not
satisfied. However, it is common to find analysts who
inconsistently use a constant WACCFCF even if the leverage
is not constant and the proper conditions are not satisfied.
In this teaching note, we use a simple numerical example to
illustrate how to model cash flows that are consistent with
constant leverage. We verify the consistency of the example
with two basic principles: conservation of cash flows and
conservation of values. The note is based on a previous one
and includes the procedure to value with constant leverage
when some restrictive conditions are not
satisfied.},
Key = {fds302932}
}
@article{fds302930,
Author = {Velez-Pareja, I and Tham, J},
Title = {Modeling Cash Flows with Constant Leverage: A Note (In
Spanish)},
Year = {2005},
Month = {June},
Abstract = {It is widely known that if the leverage is constant over
time, then the cost of equity and the Weighted Average Cost
of Capital (WACC) for the free cash flow, FCF, is constant
over time. In other words, it is inappropriate to use a
constant WACCFCF to discount the free cash flow (FCF) if the
leverage changes over time. However, it is common to find
analysts who inconsistently use a constant WACCFCF even if
the leverage is not constant. In this teaching note, we use
a simple numerical example to illustrate how to model cash
flows that are consistent with constant leverage. We verify
the consistency of the example with two basic principles:
conservation of cash flows and conservation of
values.},
Key = {fds302930}
}
@article{fds302931,
Author = {Velez-Pareja, I and Tham, J},
Title = {Modeling Cash Flows with Constant Leverage: A
Note},
Year = {2005},
Month = {June},
Abstract = {It is widely known that if the leverage is constant over
time, then the after-tax Weighted Average Cost of Capital
(WACC) is constant over time. In other words, it is
inappropriate to use a constant after-tax WACC to discount
the free cash flow (FCF) if the leverage changes over time.
However, it is common to find analysts who inconsistently
use a constant after-tax WACC even if the leverage is not
constant. In this teaching note, we use a simple numerical
example to illustrate how to model cash flows that are
consistent with constant leverage. We verify the consistency
of the example with two basic principles: conservation of
cash flows and conservation of values.},
Key = {fds302931}
}
@article{fds302929,
Author = {Tham, J and Velez-Pareja, I},
Title = {The Correct Formula for the Return to Levered Equity (for
Finite Cash Flows with Zero Growth) with Respect to the M&E
WACC},
Year = {2005},
Month = {March},
Abstract = {In this note, we show that with respect to the Miles and
Ezzell (M&E) Weighted Average Cost of Capital (WACC), the
return to levered equity for finite cash flows is constant
if the debt-equity ratio is constant. We assume that the
reader is familiar with the M&E WACC. The expression that we
derive is not new. We hope that our straightforward
derivation with simple algebra makes the M&E WACC more
widely known.},
Key = {fds302929}
}
@article{fds302928,
Author = {Tham, J and Velez-Pareja, I},
Title = {With Subsidized Debt How do we Adjust the
WACC?},
Year = {2005},
Month = {March},
Abstract = {In the standard Weighted Average Cost of Capital (WACC)
applied to the free cash flow (FCF), we assume that the cost
of debt is the market, unsubsidized rate. With debt at the
market rate and perfect capital markets, debt only creates
value in the presence of taxes through the tax shield. In
some cases, the firm may be able to obtain a loan at a rate
that is below the market rate. With subsidized debt and no
taxes, there would be a benefit to debt financing, and the
unlevered and levered values of the cash flows would be
unequal. How would we adjust the WACC to take account of the
subsidized debt? And how would we adjust the expression for
the required return to levered equity? In this paper, using
a single period example we present the adjustments to the
WACC with subsidized debt. We demonstrate the analysis for
both the WACC applied to the FCF and the WACC applied to the
capital cash flow (CCF). For simplicity, we assume that
there are no taxes. The analysis can be extended easily to
multiple periods in the presence of taxes.},
Key = {fds302928}
}
@article{fds302927,
Author = {Velez-Pareja, I and Tham, J},
Title = {Proper Solution of Circularity in the Interactions of
Corporate Financing and Investment Decisions: A Reply to the
Financing Present Value Approach},
Volume = {28},
Number = {10},
Pages = {65-92},
Year = {2005},
Month = {January},
Abstract = {It is a well known problem the interactions between the
market value of cash flows and the discount rate (usually
the weighted average cost of capital, WACC) to calculate
that value. This is mentioned in almost all textbooks in
corporate finance. However, the solution adopted by most
authors is to assume a constant leverage D%, and hence
assume that the leverage gives raise to an optimal capital
structure and the discount rate is constant. On the other
hand, most authors use the definition of the Ke, the cost of
leveraged equity for perpetuities even if the planning
horizon is finite. Among these authors we find the work of
Wood and Leitch W&L 2004. In this paper we wish to analyze
the claim made by W&L 2004 in the sense to have found an
iterative solution to the problem of circularity that
results in a near matching with the Adjusted Present Value
APV, proposed by Myers, 1974. They use as the basic
principle the fact that there is a near constant relation
between Ke the cost of equity and Kd the cost of debt. They
consider as well that the cost of debt Kd is not constant
and changes proportionately with the leverage D%. We propose
a very simple and precise approach to solve the above
mentioned circularity problem.},
Key = {fds302927}
}
@article{fds302926,
Author = {Tham, J and Velez-Pareja, I},
Title = {For Finite Cash Flows, What is the Correct Formula for the
Return to Levered Equity?},
Year = {2004},
Month = {May},
Abstract = {For cash flows in perpetuity without growth, analysts
typically use the following formula for the return to
levered equity Ke. Ke = Ku + (Ku Kd)(1 T)D/E (1) where
Ku is the return to unlevered equity, Kd is the cost of
debt, T is the tax rate, D is the market value of debt and E
is the market value of equity. What is the corresponding
formula for finite cash flows? Is it the same as equation 1?
In other words, is equation 1 appropriate for both finite
and infinite cash flows? One may be tempted to believe that
equation 1 is the general formulation for the return to
levered equity and applies to both cash flows in perpetuity
and finite cash flows. However, this conclusion is
misleading. In this short note, using simple algebra, we
derive the general formulation for the return to levered
equity for finite cash flows, and show that equation 1 is
not the general formulation for finite cash
flows.},
Key = {fds302926}
}
@article{fds302925,
Author = {Velez-Pareja, I and Tham, J},
Title = {Timanco S.A.: Unpaid Taxes, Losses Carried Forward, Foreign
Debt, Presumptive Income and Adjustment for Inflation. The
Treatment with Dcf and Eva(C) (in Spanish)},
Year = {2004},
Month = {March},
Abstract = {Velez-Pareja and Tham (2003) presented a method to match the
value added approaches (Residual Income Method, RIM and
Economic Valor Added, EVA) with the discounted cash flow,
DCF methods. There they used a relatively complex example,
but yet, far away from reality. In this note we use a real
life case from an emerging country to illustrate the same
procedure, but with additional and real life complexities
such as unpaid taxes, losses carried forward, foreign
exchange debt, presumptive income and inflation adjustments
to the financial statements. In all methods we use market
values to calculate the discount rates. We stress what
Velez-Pareja 1999 and Fernandez 2002 have said: for a single
period, RI or EVA does not measure valor. We have to include
expectations and market values in the calculation of
discount rates and hence values.},
Key = {fds302925}
}
@article{fds302924,
Author = {Velez-Pareja, I and Tham, J},
Title = {Hershey Chocolate in Two Flavors: Kd and
Ku},
Year = {2004},
Month = {February},
Abstract = {In Consistency in Chocolate: A Fresh Look at Copeland's
Hershey Foods & Co Case we showed the inconsistencies
regarding the assumption of constant leverage and the
inconsistency in the values for equity calculated with
different approaches. In this second part we show the
differences in the calculated values using an approach
consistent with the assumptions implicit in the calculation
of Copeland et al. (1995)'s Hershey example. In particular,
we show the calculation of the levered value for the firm
using the proper calculations for WACC and cost of levered
equity assuming that the discount rate for the tax savings
is Kd, the cost of debt and using finite cash flows. In this
paper, we use the terminal value calculated in the original
example. We also calculate the levered values assuming that
the discount rate for the tax savings is Ku, the cost of the
unlevered equity and using finite cash flows. We calculate
the differences in values and show the consistency of our
approach regarding the calculated values for equity. This
paper is aimed to those who have learnt valuation with that
edition (1995).},
Key = {fds302924}
}
@article{fds302923,
Author = {Velez-Pareja, I and Tham, J},
Title = {EVA(c) Made Simple: Is it Possible?},
Year = {2004},
Month = {February},
Abstract = {Velez-Pareja and Tham, 2003a, Velez-Pareja and Tham, 2003b
and Tham and Velez-Pareja, 2004 showed the matching between
discounted cash flow (DCF) methods and value added methods.
They departed from the net operating profit less adjusted
taxes NOPLAT and net income when using market values to
calculate the weighted average cost of capital (WACC) and
the cost of levered equity, Ke. In those previous works they
assumed that the proper discount rate for the tax savings is
the unlevered cost of equity, Ku. We assume the same
discount rate in this paper. The previous procedures implied
circularity between the cost of capital and the levered
values. In this paper we show that the same firm values can
be obtained using the cost of unlevered equity, Ku and the
net income and the interest charges. No circularity is found
using this procedure.},
Key = {fds302923}
}
@article{fds302921,
Author = {Velez-Pareja, I and Tham, J},
Title = {Consistency in Chocolate. A Fresh Look at Copeland's Hershey
Foods & Co Case},
Year = {2004},
Month = {January},
Abstract = {In cash flow valuation, on grounds of simplicity, it is
common to assume that the leverage is constant over time.
With constant leverage, the return to levered equity is
constant and consequently, the Weighted Average Cost of
Capital (WACC) applied to the Free Cash Flow is constant.
However, typically the constant leverage is not reflected in
the financial statements. Specifically, the values of the
annual debt (as listed in the balance sheet) as percentages
of the annual levered values are not constant. The Hershey
case study in the popular book on valuation by Copeland et
al. (2nd edition, 1995) is a good illustration of this
common and widespread inconsistency. Distressingly, readers
may not realize or recognize the inconsistency between the
cost of capital and the financial statements and authors of
textbooks make no attempt to mention it. The consistency
between the leverage assumption in the WACC applied to the
FCF and the values for the debt in the balance sheet can be
resolved if the debt is rebalanced each year to maintain the
constant leverage. In this paper, we demonstrate the
inconsistency. First, we calculate the annual leverage and
show that it is not constant. Second, we calculate the
annual equity by subtracting the annual debt values from the
annual levered values and demonstrate the discrepancies with
the present value of the CFE. This paper is aimed to those
who have learnt valuation with that edition
(1995).},
Key = {fds302921}
}
@article{fds302920,
Author = {Velez-Pareja, I and Tham, J},
Title = {Do the Rim (Residual Income Model), Eva(R) and Dcf
(Discounted Cash Flow) Really Match? (Coinciden Eva(R) Y
Utilidad Economica (Ue) Con Los Metodos De Flujo De Caja
Descontado En Valoracion De Empresas?) (Spanish
Version)},
Year = {2003},
Month = {June},
Abstract = {Vélez-Pareja and Tham (2001), presented several different
ways to valor cash flows. First, we apply the standard
after-tax Weighted Average Cost of Capital, WACC to the free
cash flow (FCF). Second, we apply the adjusted WACC to the
FCF, and third we apply the WACC to the capital cash flow.
In addition, we discount the cash flow to equity (FCA) with
the appropriate returns to levered equity. We refer to these
four ways as the "discounted cash flow (DCF)" methods. In
recent years, two new approaches, the Residual Income Method
(RIM) and the Economic Valor Added (EVA) have become very
popular. Supporters claim the RIM and EVA are superior to
the DCF methods. It may be case that the RIM and EVA
approaches are useful tools for assessing managerial
performance and providing proper incentives. However, from a
valuation point of view, the RIM and EVA are problematic
because they use book values from the balance general. We
refer to these methods as valor added methods. It is easy to
show that under certain conditions, the results from the RIM
and EVA exactly match the results from the DCF methods.
Velez-Pareja 1999 reported that when using relatively
complex examples and book values to calculate Economic Valor
Added (EVA), the results were inconsistent with Net Present
Valor (NPV). Tham 2001, reported consistency between the
Residual Income Model (RIM) and the Discounted Cash Flow
model (DCF) with a very simple example. Fernandez 2002 shows
examples where there is consistency between DCF, RIM and
EVA. He uses a constant valor for the cost of levered equity
capital and in another example constant debt. Young and
O'Byrne, 2001, show simple examples for EVA but do not show
the equivalence between DCF and EVA. Ehrbar (1998) uses a
very simple example with perpetuities and shows the
equivalence between EVA and DCF. Lundholm and O'Keefe, 2001,
show this equivalence with an example with constant Ke. Tham
2001, commented on their paper. Stewart, 1999, shows the
equivalence between DCF and EVA with an example using a
constant discount rate. Copeland, et al, show an example
with constant WACC and constant cost of equity even with
varying debt and assuming a target leverage that is
different to the actual leverage. In general, textbooks do
not specify clearly how EVA should be used to give
consistent results. In this teaching note using a complex
example with varying debt, varying leverage and terminal (or
continuing valor), we show the consistency between DCF, RIM
and EVA. We stress what Velez-Pareja 1999 and Fernandez 2002
have said: for a single period, RI or EVA does not measure
valor. We have to include expectations and market values in
the calculation of discount rates and hence
values.},
Key = {fds302920}
}
%% Papers Published
@article{fds302945,
Author = {Tham, J and Velez-Pareja, I},
Title = {An Embarrassment of Riches: Winning Ways to Value with the
WACC},
Volume = {5},
Pages = {1-23},
Year = {2019},
Month = {April},
Abstract = {Existen diversas maneras de calcular el Coste Promedio
Ponderado de Capital (CPPC) o WACC (Weighted Average Cost of
Capital) y para el principiante, la plétora de
posibilidades puede ser confusa. Presentamos, pues, un marco
general para la clasificación de los CPPC que se aplican al
FCF y al CCF. Por el momento, evitamos las complejidades.
Para facilitar el debate, clasificamos los diversos CPPC en
tres dimensiones. Esperamos que dicho marco estructural
ayude al lector a hacer la correcta elección con respecto
al cálculo del coste de capital en la práctica. En primer
lugar, mostramos un debate cualitativo sobre las dimensiones
de dicho marco. En segundo lugar, especificamos las
fórmulas y cálculos apropiados para las celdas del cuadro.
Al principio, es importante subrayar que este artículo
trata únicamente con flujos de caja finitos o finite cash
flows. A nuestro parecer, es mejor analizar expresiones para
el coste de capital que sean relevantes para los finite cash
flow, para lo que no se necesita mayor justificación.
Seguir usando fórmulas de coste de capital apropiadas para
los cash flows a perpetuidad resulta inexplicable e
incomprensible. Desde un punto de vista práctico, los free
cash flows se derivan de los balances financieros, que no se
construyen a perpetuidad. En el mejor de los casos, las
expresiones para el coste de capital derivadas de los cash
flows a perpetuidad pueden ser aproximaciones razonables
para los finite cash flows. En el peor de los casos, los
resultados pueden ser equívocos.},
Key = {fds302945}
}
@article{fds342641,
Author = {Tham, J and Velez-Pareja, I and Ibragimov, R},
Title = {A Defense of the Classic FCF WACC: A Rejoinder to the
Retrospection},
Year = {2019},
Month = {March},
Key = {fds342641}
}
@article{fds342644,
Author = {Tham, J},
Title = {Evidence-Based Policy Making (EBPM) Is Wicked: A Critical
Assessment From the Periphery},
Year = {2018},
Month = {December},
Key = {fds342644}
}
@article{fds342643,
Author = {Tham, J},
Title = {Critical Factors for Creating a Successful Digital Public
Administration},
Year = {2018},
Month = {December},
Key = {fds342643}
}
@article{fds342646,
Author = {Tham, J},
Title = {The Unbearable Enlightenment (and Lightness) of Rigorous
Research Evidence in Policy Making},
Year = {2018},
Month = {December},
Key = {fds342646}
}
@article{fds342647,
Author = {Tham, J},
Title = {Transferability of Research Findings: Lessons From the BCURE
(Building Capacity for the Use of Research Evidence) Program
for Implementing EBPM (Evidence-Based Policy Making) in
Non-Western Countries},
Year = {2018},
Month = {December},
Key = {fds342647}
}
@article{fds342648,
Author = {Tham, J},
Title = {Relevance of Evidence-Based Policy Making (EBPM) for
Governance (Public Administration) in Non-Western Countries:
Lessons From the BCURE (Building Capacity to Use Research
Evidence) Program},
Year = {2018},
Month = {December},
Key = {fds342648}
}
@article{fds342642,
Author = {Tham, J},
Title = {Digital Technologies and the Future of Employment},
Year = {2018},
Month = {December},
Key = {fds342642}
}
@article{fds342645,
Author = {Tham, J},
Title = {Promoting Evidence-Based Policy Making (EBPM) in Non-Western
Countries: From the Periphery, a Practitioner’s
Perspective on the Challenges},
Year = {2018},
Month = {December},
Key = {fds342645}
}
@article{fds327567,
Author = {Velez-Pareja, I and Tham, J},
Title = {Do Personal Taxes Destroy Tax Shields?},
Year = {2016},
Month = {February},
Key = {fds327567}
}
@article{fds342649,
Author = {Ibragimov, R and Velez-Pareja, I and Tham, J},
Title = {Mejora de la Medición del Desempeño con el vea (EVA)
Operativo Y Total (Sharpening Performance Measurement with
the Operating and Total EVA)},
Year = {2013},
Month = {March},
Key = {fds342649}
}
@article{fds342650,
Author = {Ibragimov, R and Velez-Pareja, I and Tham, J},
Title = {Sharpening Performance Measurement with the Operating and
Total EVA},
Year = {2013},
Month = {March},
Key = {fds342650}
}
@article{fds342651,
Author = {Ibragimov, R and Velez-Pareja, I and Tham, J},
Title = {EVA Performance Measurement is Faulty: So You May Be
Persuaded to Switch to a Robust OEVA-TEVA
Alternative},
Year = {2013},
Month = {February},
Key = {fds342651}
}
@article{fds342652,
Author = {Ibragimov, R and Velez-Pareja, I and Tham, J},
Title = {VAIC: New Financial Performance Metric and Valuation
Tool},
Year = {2012},
Month = {May},
Key = {fds342652}
}
@article{fds342653,
Author = {Velez-Pareja, I and Tham, J},
Title = {Una Introducción Al Costo De Capital (An Introduction to
the Cost of Capital)},
Year = {2012},
Month = {February},
Key = {fds342653}
}
@article{fds342654,
Author = {Velez-Pareja, I and Tham, J},
Title = {Estimación Flujos de Caja Para Evaluación de Proyectos y
Valoración de Empresas (Estimating Cash Flows for Project
Assessment and Firm Valuation)},
Year = {2012},
Month = {January},
Key = {fds342654}
}
@article{fds342655,
Author = {Velez-Pareja, I and Tham, J},
Title = {Mas Alla de Las Proyecciones: El valor Terminal. (Beyond
Forecasting Peridod: The Terminal Value)},
Year = {2012},
Month = {January},
Key = {fds342655}
}
@article{fds342656,
Author = {Tham, J and Velez-Pareja, I and Kolari, JW},
Title = {Cost of Capital with Levered Cost of Equity as the Risk of
Tax Shields},
Journal = {Mays Business School Research Paper},
Number = {2011},
Year = {2010},
Month = {December},
Key = {fds342656}
}
@article{fds342657,
Author = {Tham, J and Velez-Pareja, I and Kolari, JW},
Title = {Analytical Solution for Optimal Capital Structure in
Perpetuities},
Year = {2010},
Month = {December},
Key = {fds342657}
}
@article{fds342658,
Author = {Velez-Pareja, I and Tham, J},
Title = {Company Valuation in an Emerging Economy - Caldonia: A Case
Study},
Journal = {The Valuation Journal},
Volume = {5},
Number = {2},
Pages = {4-45},
Year = {2010},
Month = {October},
Key = {fds342658}
}
@article{fds342659,
Author = {Tham, J and Velez-Pareja, I and Kolari, JW},
Title = {Costo de Capital con Costo del Patrimonio Apalancado Como el
Riesgo de los Escudos Fiscales (Cost of Capital with Levered
Cost of Equity as the Risk of Tax Shields)},
Journal = {Revista Emprendedorismo Y Estrategia Organizacional},
Volume = {1},
Number = {2},
Pages = {15-19},
Year = {2010},
Month = {September},
Key = {fds342659}
}
@article{fds342660,
Author = {Velez-Pareja, I and Tham, J},
Title = {Timanco S.A.: Unpaid Taxes, Losses Carried Forward, Foreign
Debt, Presumptive Income and Adjustment for Inflation:
Matching DCF and EVA©},
Year = {2010},
Month = {July},
Key = {fds342660}
}
@article{fds342661,
Author = {Tham, J and Velez-Pareja, I},
Title = {Will the Deflated WACC Please Stand Up? And the Real WACC
Should Sit Down},
Journal = {Cuadernos Latinoamericanos De Administración, Vol.
Vi},
Number = {12},
Year = {2010},
Month = {May},
Key = {fds342661}
}
@article{fds342662,
Author = {Velez-Pareja, I and Tham, J},
Title = {An Introduction to the Cost of Capital},
Year = {2010},
Month = {March},
Key = {fds342662}
}
@article{fds342663,
Author = {Velez-Pareja, I and Tham, J},
Title = {Estimating Cash Flows for Project Appraisal and Firm
Valuation},
Year = {2010},
Month = {February},
Key = {fds342663}
}
@article{fds342664,
Author = {Glenday, G and Shukla, GP and Tham, J and Kapoor, D and Maitra, A and Voetsch, R},
Title = {USAID/India Reform Project Compendium with Practitioners'
Guide, Volume V State Fiscal Management Reform},
Year = {2009},
Month = {December},
Key = {fds342664}
}
@article{fds342665,
Author = {Tham, J},
Title = {Project Appraisal Simplified},
Year = {2009},
Month = {December},
Key = {fds342665}
}
@article{fds342666,
Author = {Velez-Pareja, I and Tham, J},
Title = {A Note on the Weighted Average Cost of Capital WACC (Nota
Sobre El Costo Promedio De Capital)},
Journal = {Monografías},
Number = {62},
Year = {2008},
Month = {September},
Key = {fds342666}
}
@article{fds302949,
Author = {Velez-Pareja, I and Ibragimov, R and Tham, J},
Title = {Constant Leverage and Constant Cost of Capital: A Common
Knowledge Half-Truth},
Journal = {Estudios Gerenciales},
Volume = {24},
Number = {107},
Pages = {13-34},
Year = {2008},
Month = {April},
Abstract = {http://ssrn.com/abstract=997435},
Key = {fds302949}
}
@article{fds342667,
Author = {Velez-Pareja, I and Tham, J},
Title = {The Mismatching of Apv and the Dcf in Brealey, Myers and
Allen 8th Edition of Principles of Corporate Finance, 2006
(La Discrepancia Entre El Apv Y El Dcf En La 8va EdicióN De
Brealey, Myers Y Allen, Principles of Corporate Finance,
2006)},
Year = {2006},
Month = {September},
Key = {fds342667}
}
@article{fds302946,
Author = {Vélez-Pareja, I and Tham, J and Fernández, V},
Title = {Adjustment of the WACC with Subsidized Debt in the Presence
of Corporate Taxes: The N-Period Case},
Volume = {4},
Pages = {1-19},
Year = {2005},
Month = {October},
Abstract = {In the Weighted Average Cost of Capital (WACC) applied to
the free cash flow (FCF), we assume that the cost of debt is
the market, unsubsidized rate. With debt at the market rate
and perfect capital markets, debt only creates value in the
presence of taxes through the tax shield. In some cases, the
firm may be able to obtain a loan at a rate that is below
the market rate. With subsidized debt and taxes, there would
be a benefit to debt financing, and the unleveraged and
leveraged values of the cash flows would be unequal. The
benefit of lower tax savings are offset by the benefit of
the subsidy. These two benefits have to be introduced
explicitly. In this paper we present the adjustments to the
WACC with subsidized debt and taxes and the cost of
leveraged equity for multiple periods. We demonstrate the
analysis for both the WACC applied to the FCF and the WACC
applied to the capital cash flow (CCF). We use the
calculation of the Adjusted Present Value, APV, to consider
both, the tax savings and the subsidy. We show how all the
methods match.},
Key = {fds302946}
}
@article{fds342668,
Author = {Velez-Pareja, I and Tham, J},
Title = {Market Value Calculation and the Solution of Circularity
Between Value and the Weighted Average Cost of Capital WACC
(A Note on the Weighted Average Cost of Capital
WACC)},
Journal = {Revista De Administração Mackenzie (Ram)},
Volume = {10},
Number = {6},
Year = {2005},
Month = {August},
Key = {fds342668}
}
@article{fds302948,
Author = {Velez-Pareja, I and Tham, J and Fernandez, V},
Title = {Adjustment of the Wacc with Subsidized Debt in the Presence
of Corporate Taxes: The N-Period Case},
Journal = {Estudios De Administración},
Volume = {12},
Number = {2},
Pages = {45-66},
Year = {2005},
Month = {March},
Abstract = {In the Weighted Average Cost of Capital (WACC) applied to
the free cash flow (FCF), we assume that the cost of debt is
the market, unsubsidized rate. With debt at the market rate
and perfect capital markets, debt only creates value in the
presence of taxes through the tax shield. In some cases, the
firm may be able to obtain a loan at a rate that is below
the market rate. With subsidized debt and taxes, there would
be a benefit to debt financing, and the unleveraged and
leveraged values of the cash flows would be unequal. The
benefit of lower tax savings are offset by the benefit of
the subsidy. These two benefits have to be introduced
explicitly. In this paper we present the adjustments to the
WACC with subsidized debt and taxes and the cost of
leveraged equity for multiple periods. We demonstrate the
analysis for both the WACC applied to the FCF and the WACC
applied to the capital cash flow (CCF). We use the
calculation of the Adjusted Present Value, APV, to consider
both, the tax savings and the subsidy. We show how all the
methods match.},
Key = {fds302948}
}
@article{fds302952,
Author = {Fieten, P and Kruschwitz, L and Laitenberger, J and Löffler, A and Tham, J and Vélez-Pareja, I and Wonder, N},
Title = {Comment on "The value of tax shields is NOT equal to the
present value of tax shields"},
Journal = {The Quarterly Review of Economics and Finance},
Volume = {45},
Number = {1},
Pages = {184-187},
Publisher = {Elsevier BV},
Year = {2005},
Month = {February},
url = {http://dx.doi.org/10.1016/j.qref.2004.07.004},
Abstract = {Fernandez [2004; The value of tax shields is NOT equal to
the present value of tax shields. Journal of Financial
Economics, 73, 145-165] claims to derive a formula for the
valuation of debt tax shields for firms with cash flows that
grow perpetually at a constant rate. We show that his
formula is incorrect. © 2004 Board of Trustees of the
University of Illinois. All rights reserved.},
Doi = {10.1016/j.qref.2004.07.004},
Key = {fds302952}
}
@article{fds302947,
Author = {Tham, J and Velez-Pareja, I},
Title = {An Integrated, Consistent Market-Based Framework for Valuing
Finite Cash Flows},
Journal = {Management Research News},
Volume = {28},
Number = {10},
Pages = {65-92},
Year = {2005},
Month = {January},
Abstract = {http://ssrn.com/abstract=648301},
Key = {fds302947}
}
@article{fds342669,
Author = {Velez-Pareja, I and Tham, J},
Title = {Eva© Made Simple: Is it Possible? (Una Forma Sencilla De
Calcular El Eva© )},
Year = {2004},
Month = {May},
Key = {fds342669}
}
@article{fds302951,
Author = {Tham, J},
Title = {Coinciden EVA© y flujo de Caja Descondado?},
Journal = {Poliantea},
Publisher = {Revista Academica y Cultural Fundacion Politecnico
Grancolombiano Institucion Universitaria No.
1},
Year = {2004},
Month = {May},
Key = {fds302951}
}
@article{fds342670,
Author = {Tham, J and Thang, TV},
Title = {Risk-Neutral Valuation: A Gentle Introduction (1) Dinh Gia
Theo Rui Ro-Trung Hoa: Phan Gioi Thieu (1) (Vietnamese
version)},
Year = {2004},
Month = {January},
Key = {fds342670}
}
@article{fds342671,
Author = {Wonder, NX and Fieten, P and Kruschwitz, L and Laitenberger, J and Loeffler, A and Tham, J and Velez-Pareja, I},
Title = {Comment on 'the Value of Tax Shields is Not Equal to the
Present Value of Tax Shields', Including an Arbitrage
Opportunity},
Journal = {The Quarterly Review of Economics and Finance},
Volume = {45},
Number = {1},
Pages = {188-192},
Year = {2003},
Month = {December},
Key = {fds342671}
}
@article{fds342672,
Author = {Tham, J and Thang, TV},
Title = {Practical Equity Valuation: A Simple Approach - Dinh Gia Von
Chu So Huu Tren Thuc te:Mot Phuong Phap Don Gian (Vietnamese
version)},
Year = {2003},
Month = {December},
Key = {fds342672}
}
@article{fds342673,
Author = {Wonder, NX and Velez-Pareja, I and Tham, J and Loeffler, A and Fieten,
P},
Title = {Revised Comment on 'The Value of Tax Shields is NOT Equal to
the Present Value of Tax Shields'},
Year = {2003},
Month = {November},
Key = {fds342673}
}
@article{fds342674,
Author = {Tham, J and Thang, TV},
Title = {Financial Discount Rates in Project Appraisal (Suat Chiet
Khau Tai Chinh trong Tham Dinh Du An) (Vietnamese
version)},
Year = {2003},
Month = {August},
Key = {fds342674}
}
@article{fds342675,
Author = {Tham, J and Thang, TV},
Title = {Consistent Valuation in the Two-Period Case: A Pedagogical
Note (Dinh Gia Thong Nhat trong Truong Hop Hai Giai Doan:
Bai Viet Giang Day) (Vietnamese version)},
Year = {2003},
Month = {August},
Key = {fds342675}
}
@article{fds342676,
Author = {Thang, TV and Tham, J},
Title = {Estimating The Cost of Capital with Debt Financing in a
Foreign Currency (Uoc Luong Chi Phi Von Dau Tu Co No Vay
Ngoai Te) (Vietnamese version)},
Year = {2003},
Month = {July},
Key = {fds342676}
}
@article{fds342677,
Author = {Thang, TV and Tham, J and Wonder, NX},
Title = {The Non-Conventional WACC With Risky Debt and Risky Tax
Shield (WACC Dac Biet Doi Voi No Co Rui Ro va La Chan Thue
Co Rui Ro) (Vietnamese version)},
Year = {2003},
Month = {June},
Key = {fds342677}
}
@article{fds342678,
Author = {Velez-Pareja, I and Tham, J},
Title = {Do the RIM (Residual Income Model), EVA(R) and DCF
(Discounted Cash Flow) Really Match?},
Year = {2003},
Month = {June},
Key = {fds342678}
}
@article{fds302919,
Author = {Tham, J and Velez-Pareja, I and Wonder, NX},
Title = {Comment on 'The Value of Tax Shields is NOT Equal to the
Present Value of Tax Shields'},
Volume = {45},
Number = {1},
Pages = {184-187},
Year = {2003},
Month = {May},
Abstract = {In a recent paper, Pablo Fernandez (2002) makes the unusual
and paradoxical sounding claim that for cash flows in
perpetuity with a constant growth rate g, the value of the
tax shields VTS is NOT equal to the present value of the tax
shields. To be specific, Fernandez purportedly shows that
the formula for the present value of the tax shields is as
follows. VTS = TDKu/(Ku - g) Where Ku is the return to
unlevered equity, g is the constant growth rate, T is the
tax rate and D is the market value of debt. Fernandez (2002)
asserts that the value of the tax shield, as given in
equation, should be properly interpreted as the difference
in the taxes paid by the unlevered and levered firms, where
the taxes have different risk profiles. Let VTxU be the
present value of the taxes paid by the unlevered firm,
discounted by KTxU, which is the appropriate risk-adjusted
discount, and let VTxL be the present value of the taxes
paid by the levered firm, discounted by KTxL, which is the
appropriate risk-adjusted discount. In this note, we assess
the validity of the proposed expression for the value of the
tax shield. The note is organized is as follows. In Section
One, we review and discuss the assumptions underlying the
model that Fernandez uses to derive equation 1. In Section
Two, we examine critically the derivation of equation 1 and
its general relevance and applicability.},
Key = {fds302919}
}
@article{fds342679,
Author = {Tham, J},
Title = {Estimating the Cost of Capital with Debt Financing in a
Foreign Currency},
Year = {2003},
Month = {May},
Key = {fds342679}
}
@article{fds342680,
Author = {Tham, J and Velez-Pareja, I},
Title = {The Holy Grail in the Quest for Value (with Alpha Methods
and Omega Theories)},
Year = {2003},
Month = {March},
Key = {fds342680}
}
@article{fds342681,
Author = {Velez-Pareja, I and Tham, J},
Title = {The Holy Grail in the Quest for Value (with Alpha Methods
and Omega Theories) (CHEN THANH TRONG TIM KIEM GIA TRI (theo
cac Mo hinh Alpha va ly thuyet Omega)},
Year = {2003},
Month = {March},
Key = {fds342681}
}
@article{fds342682,
Author = {Tham, J},
Title = {Constructing the Free Cash Flow (FCF) with Retention of
Surplus Funds: The No Tax Case},
Year = {2003},
Month = {February},
Key = {fds342682}
}
@article{fds342683,
Author = {Tham, J and Thang, TV},
Title = {Equivalence between Discounted Cash Flow (DCF) and Residual
Income (RI) (Su Tuong Duong Giua Dong Tien Chiet khau va Thu
Nhap Rong)},
Year = {2003},
Month = {February},
Key = {fds342683}
}
@article{fds342684,
Author = {Tham, J},
Title = {The Present Value of the Tax Shield (PVTS) for FCF in
Perpetuity With Growth},
Year = {2002},
Month = {December},
Key = {fds342684}
}
@article{fds343673,
Author = {Tham, J and Velez-Pareja, I},
Title = {Much Ado about Nothing: A Non-technical Comment on the
Present Value of the Tax Shield (PVTS)},
Year = {2002},
Month = {October},
Key = {fds343673}
}
@article{fds342685,
Author = {Tham, J},
Title = {Reconciling the Two Definitions of the Present Value of the
Tax Shield (PVTS)},
Year = {2002},
Month = {October},
Key = {fds342685}
}
@article{fds342686,
Author = {Tham, J},
Title = {Weighted Average Cost of Capital (WACC) with Risky Debt: A
Simple Exposition (I)},
Year = {2002},
Month = {October},
Key = {fds342686}
}
@article{fds342687,
Author = {Velez-Pareja, I and Tham, J},
Title = {Valuation in an Inflationary Environment},
Year = {2002},
Month = {May},
Key = {fds342687}
}
@article{fds342688,
Author = {Tham, J},
Title = {Framework for Economic Appraisal: a Simple Exposition of
Harberger's Approach},
Year = {2002},
Month = {May},
Key = {fds342688}
}
@article{fds342689,
Author = {Tham, J and Velez-Pareja, I},
Title = {Consistent Valuation of a Finite Stream of Cash Flows with a
Terminal Value},
Year = {2002},
Month = {April},
Key = {fds342689}
}
@article{fds342690,
Author = {Tham, J and Wonder, NX},
Title = {Inter-temporal Resolution of Risk: the Case of the Tax
Shield},
Year = {2002},
Month = {April},
Key = {fds342690}
}
@article{fds342691,
Author = {Tham, J and Velez-Pareja, I},
Title = {Computer, Computer, on the Wall, Which Cost of Capital is
Fairest, of Them All?},
Year = {2002},
Month = {March},
Key = {fds342691}
}
@article{fds342692,
Author = {Tham, J and Wonder, NX},
Title = {Equivalence Between the FCF Method, the CCF Method and the
APV Approach},
Year = {2002},
Month = {February},
Key = {fds342692}
}
@article{fds342693,
Author = {Velez-Pareja, I and Tham, J},
Title = {Brief Introduction to the Construction of Financial
Statements I},
Year = {2002},
Month = {January},
Key = {fds342693}
}
@article{fds342694,
Author = {Tham, J and Loeffler, A},
Title = {The Miles & Ezzell (M & E) WACC Reconsidered},
Year = {2002},
Month = {January},
Key = {fds342694}
}
@article{fds342695,
Author = {Tham, J},
Title = {Risk-neutral Valuation: A Gentle Introduction
(2)},
Year = {2001},
Month = {December},
Key = {fds342695}
}
@article{fds342696,
Author = {Tham, J and Wonder, NX},
Title = {The Non-Conventional WACC with Risky Debt and Risky Tax
Shield},
Year = {2001},
Month = {December},
Key = {fds342696}
}
@article{fds342697,
Author = {Tham, J and Velez-Pareja, I},
Title = {Modeling the Impacts of Inflation in Investment
Appraisal},
Year = {2001},
Month = {December},
Key = {fds342697}
}
@article{fds342698,
Author = {Tham, J},
Title = {Risk-neutral Valuation: A Gentle Introduction
(1)},
Year = {2001},
Month = {November},
Key = {fds342698}
}
@article{fds342699,
Author = {Tham, J and Wonder, NX},
Title = {Unconventional Wisdom on PSI, the Appropriate Discount Rate
for the Tax Shield},
Year = {2001},
Month = {September},
Key = {fds342699}
}
@article{fds342700,
Author = {Tham, J},
Title = {The Unbearable Lightness of EVA in Valuation},
Year = {2001},
Month = {April},
Key = {fds342700}
}
@article{fds342701,
Author = {Tham, J and Velez-Pareja, I},
Title = {The Correct Discount Rate for the Tax Shield: The N-period
Case},
Year = {2001},
Month = {April},
Key = {fds342701}
}
@article{fds302950,
Author = {Tham, J and Sabin, L},
Title = {Conceptual Issues in Financial Risk Analysis: A Review for
Practitioners},
Year = {2001},
Month = {February},
Key = {fds302950}
}
@article{fds342702,
Author = {Tham, J},
Title = {Horsing Around with Clean Surplus Relations},
Year = {2001},
Month = {January},
Key = {fds342702}
}
@article{fds342703,
Author = {Tham, J},
Title = {Consistent Value Estimates from the Discounted Cash Flow
(DCF) and Residual Income (RI) Models in M & M Worlds
Without and With Taxes},
Year = {2000},
Month = {October},
Key = {fds342703}
}
@article{fds342704,
Author = {Tham, J},
Title = {Discrete Option Pricing: A Simplified Exposition (Part
II)},
Year = {2000},
Month = {September},
Key = {fds342704}
}
@article{fds343674,
Author = {Tham, J},
Title = {Discrete Option Pricing: A Simplified Exposition (Part
I)},
Year = {2000},
Month = {June},
Key = {fds343674}
}
@article{fds342705,
Author = {Tham, J},
Title = {Consistent Valuation in the Two-Period Case: A Pedagogical
Note},
Year = {2000},
Month = {June},
Key = {fds342705}
}
@article{fds342706,
Author = {Tham, J},
Title = {Practical Equity Valuation: A Simple Approach},
Year = {2000},
Month = {June},
Key = {fds342706}
}
@article{fds302941,
Author = {Tham, J},
Title = {Return to Equity in Project Finance for Infrastructure},
Year = {2000},
Month = {February},
Abstract = {The Vietnamese version is available at: http://ssrn.com/abstract=493985
In project finance, the viability of the project is based on
the expected cash flows generated by the project rather than
on the strength of the company's balance sheet. Thus, it is
relevant to construct the annual cash flow from the equity
point of view and estimate the annual returns to the equity
holder but the usual simplifications for calculating the
cost of capital do not permit the explicit estimation of the
annual returns to the equity holder. In this paper, I relax
many of the assumptions in the typical analysis, and provide
a simple and practical way to estimate directly the annual
returns to the equity holder. This approach requires the
calculation of the annual present values of the future cash
flows from the point of view of the equity holder. Two
equivalent ways for calculating the annual equity values are
shown. Most importantly, the construction of the cash flow
statement from the equity point of view permits the analysis
of the likely impacts of contracts on the risk profile of
the project for the equity holder.},
Key = {fds302941}
}
@article{fds342707,
Author = {Tham, J},
Title = {Impact of Taxes on Multiperiod Financial Discount
Rates},
Year = {1999},
Month = {December},
Key = {fds342707}
}
@article{fds342708,
Author = {Tham, J and Thang, TV},
Title = {Multiperiod Financial Discount Rates in Project Appraisal:
The No-Tax Case (Suat Chiet Khau Tai Chinh Nhieu Giai Doan
trong Tham Dinh Du An: Truong hop Khong Co
Thue)},
Year = {1999},
Month = {August},
Key = {fds342708}
}
@article{fds302940,
Author = {Tham, J},
Title = {Multiperiod Financial Discount Rates in Project
Appraisal},
Year = {1999},
Month = {July},
Abstract = {The typical assumption about cashflows in perpetuity is not
appropriate in practical project appraisal because the
length of project life is always finite. In this paper, I
discuss the calculation of multiperiod financial discount
rates for a project with a finite life. The impact of taxes
and inflation will also be included in the analysis. First,
we may assume that a constant debt-equity ratio is
maintained during the life of the project. The loan schedule
is constructed to keep the debt-equity ratio constant for
the life of the project. Second, the loan schedule may be
fixed. In this case, the debt-equity ratio changes over the
life of the project. By explicitly calculating the
appropriate discount rate for each period, it is not
necessary to assume that the debt-equity ratio is constant
and the cashflows are in perpetuity.},
Key = {fds302940}
}
@article{fds302939,
Author = {Tham, J},
Title = {Financial Discount Rates in Project Appraisal},
Year = {1999},
Month = {June},
Abstract = {In the financial appraisal of a project, the cashflow
statements are constructed from two points of view: the
Total Investment (TI) Point of View and the Equity Point of
View. One of the most important issues is the estimation of
the correct financial discount rates for the two points of
view. In the presence of taxes, the benefit of the tax
shield from the interest deduction may be excluded or
included in the free cashflow (FCF) of the project.
Depending on whether the tax shield is included or excluded,
the formulas for the weighted average cost of capital (WACC)
will be different. In this paper, using some basic ideas of
valuation from corporate finance, the estimation of the
financial discount rates for cashflows in perpetuity and
single-period cashflows will be illustrated with simple
numerical examples.},
Key = {fds302939}
}
@article{fds302938,
Author = {Tham, J},
Title = {Present Value of the Tax Shield in Project
Appraisal},
Journal = {Harvard Institute for International Development (Hiid),
Development Discussion Paper No. 695},
Year = {1999},
Month = {April},
Abstract = {Available at www.hiid.harvard.edu. Also available at
papers.SSRN. com},
Key = {fds302938}
}
@article{fds342709,
Author = {Tham, J},
Title = {Present Value of the Tax Shield: A Note},
Year = {1999},
Month = {April},
Key = {fds342709}
}
%% Other
@misc{fds302918,
Author = {Velez-Pareja, I and Tham, J},
Title = {Prospective Analysis: Guidelines for Forecasting Financial
Statements},
Pages = {155-225},
Booktitle = {Investment Management: A Modern Guide to Security Analysis
and Stock Selection},
Publisher = {SPRINGER},
Editor = {Vishwanath, SR and Krishnamurti, C},
Year = {2009},
ISBN = {978-3-540-88801-7},
Abstract = {http://ssrn.com/abstract=1026210},
Key = {fds302918}
}
@misc{fds303112,
Author = {Velez-Pareja, I and Tham, J},
Title = {Prospective Analysis: Guidelines for Forecasting Financial
Statements},
Booktitle = {Investment Management},
Year = {2008},
Month = {May},
Abstract = {We discuss some ideas useful when forecasting financial
statements that are based on historical data. The chapter is
organized as follows: First we discuss the relevance of
prospective analysis for non traded firms. In a second
section we a basic reviews of subjects that will be needed
for forecasting financial statements. We discuss the use of
plugs for financial forecasting. We show an alternate
approach to avoid such popular practice. The approach we
propose follows the Double Entry Principle. This principle
guarantees consistent and error free financial statements.
We show with a simple example how the plug works and its
limitations and problems that arise when using it. Next, the
reader will find what information is needed for the
forecasting of financial statements and where and how to
find it. We present the procedure to identify policies that
govern the ongoing of a firm such as accounts receivable and
payable, inventories, dividend payout, and identify price
increases and other basic variables. We also deal with the
real life problem of a firm with multiple products and/or
services. We start with historical financial statements. We
include inflation rates, real increases in prices and volume
and policies in order to construct intermediate tables that
make very easy the construction of the pro forma financial
statements. We use a detailed example to illustrate the
method. We derive the cash flows that will be used in the
book to value a firm. This type of models might be used by
non traded firm for a permanent assessment of the value
creation. Finally we show some tools to perform sensitivity
analysis for financial management and analysis.},
Key = {fds303112}
}
@misc{fds302942,
Author = {Glenday, G and Tham, J},
Title = {What weights in the WACC?},
Publisher = {Sanford Institute Working Paper Series, paper No.
SAN03-01},
Year = {2003},
Key = {fds302942}
}
@misc{fds302917,
Author = {Tham, J},
Title = {Equivalence between Discounted Cash Flow (DCF) and Residual
Income (RI)},
Year = {2001},
Month = {February},
Abstract = {Recently, the residual income (RI) model has become very
popular in valuation because it purports to measure "value
added" by explicitly taking into account the cost for
capital in the income statement. Some proponents of the
residual income approach have even suggested that the RI
model is superior to the discounted cash flow (DCF) method
and consequently, the DCF model should be abandoned in favor
of the RI model. The residual income model is seductive
because it purports to provide assessments of performance at
any given point in time. The claim that the RI model is
superior to the DCF model in valuation is puzzling because
the RI model is simply an interesting algebraic
rearrangement of the DCF model. Since the same information
is used in both models, it is not unexpected that both
models should give the same valuation results. In this
paper, I examine the idea that the residual income model is
superior to the discounted cash flow model. Using a simple
numerical example, I show that in a M & M world, the two
approaches to valuation are equivalent. In practice, the
choice between the two valuation methods will be determined
by the ease with which the relevant information is
available.},
Key = {fds302917}
}
@misc{fds302916,
Author = {Sabin, L and Tham, J},
Title = {Conceptual Issues in Financial Risk Analysis: a Review for
Practitioners. manuscript},
Year = {2001},
Key = {fds302916}
}
@misc{fds302913,
Author = {Tham, J},
Title = {Human and Physical Resources for Junior Secondary Education
(JSE), 1986-1994},
Journal = {Report on Indonesian Education (Unpublished)},
Year = {1996},
Key = {fds302913}
}
@misc{fds302915,
Author = {Tham, J},
Title = {Enrollment Trends in Junior Secondary Education (JSE),
1986-1994},
Journal = {Reports on Indonesian Education (Unpublished)},
Year = {1996},
Key = {fds302915}
}
@misc{fds302910,
Author = {Tham, J},
Title = {Parents’ Expenditures on Junior Secondary Education
(JSE)},
Journal = {Report on Indonesian Education (Unpublished)},
Year = {1996},
Key = {fds302910}
}
@misc{fds302914,
Author = {Tham, J},
Title = {Measures of Efficiency in Junior Secondary Education (JSE),
1986-1994: dropouts, repeaters and graduates},
Journal = {Reports on Indonesian Education (Unpublished)},
Year = {1996},
Key = {fds302914}
}
@misc{fds302911,
Author = {Tham, J},
Title = {Estimate of the cost for expansion of Junior Secondary
Education (JSE)},
Journal = {Report on Indonesian Education (Unpublished)},
Year = {1996},
Key = {fds302911}
}
@misc{fds302912,
Author = {Tham, J},
Title = {Analysis of Development and Routine Expenditures for Junior
Secondary Education (JSE)},
Journal = {Report on Indonesian Education (Unpublished)},
Year = {1996},
Key = {fds302912}
}