Content preview from Fundamentals of Financial Management, Third Edition
- What are the different concepts of a firm’s value?
- Intrinsic value meaning present value of future earnings
- Market value at which a firm’s assets are sold
- Book value meaning original cost of assets minus depreciation
- Liquidation value meaning sale value of the assets after the firm ceases to work
- Going-concern value including also growth factor and goodwill
- Replacement value meaning the cost of replacing assets in current conditions
- How is a bond valued?
- The value of a fixed-interest/zero-coupon bond is the sum of the present value of the interest payment and the repayment of the principal during different periods discounted by the required rate of return. In terms of equation:
- In a perpetual bond, a single-period interest ...
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ISBN: 9789332508170