Evaluation forum
Evaluation forum
当前位置: Website homepage > News Center > Evaluation forum1. Specific methods of income method
The income method is based on the theory of utility value and measures the current value of assets through future income and risk. The specific methods of income method mainly include dividend discount model (DDM model), enterprise free cash flow discount model (FCFF model), equity free cash flow discount model (FCFE model), economic value added discount model (EVA model), residual income discount model (RIM model) and adjusted present value model (APV model).
2. Comparison and selection of specific methods
The application of DDM model is faced with such challenges as how to determine the dividend payout rate, how to adjust the dividend payout rate according to the shareholders' proposed additional investment, whether to calculate the long-term growth rate based on the dividend payout rate, and whether to consider the value of non-operating assets, which are not widely used in practice. The essence of free cash flow of equity is a kind of "potential dividend". FCF model can solve the problems encountered by DDM model. Both EVA model and RIM model belong to the excess return model, which can more intuitively display the driving factors of enterprise value. The difference is that the former is the full-investment model, and the latter is the equity model. The APV model is derived from the relevant discussion of MM theorem 2. It is also suggested that the expected bankruptcy cost should be considered when applying the APV model.
Many studies have shown that the FCFF model, FCFE model, EVA model, RIM model and APV model are equivalent, so it is not important to choose which model, but whether these models can be used correctly. As long as they are used properly, these models can get the same evaluation results. Using the equivalent characteristics of each model can guide us to correctly build the evaluation model and verify the evaluation results. For example, based on the equivalence relationship between the models, it can be deduced that the capital structure should be calculated dynamically in the detailed forecast period (including the capital structure should be calculated year by year and the equity capital should be calculated by cycle iteration), the discount coefficient should be calculated by rolling calculation, and the discount coefficient in the first forecast period should be calculated by simple interest. In practice, FCFF model and FCFE model are most widely used, and FCFF model has more extensive adaptability. In various discount models, there is a difference between mid-year discount and year-end discount. However, further research found that when the benchmark date is not the end of the year, using the mid-year discount method, there will be a problem that the discount period between the first period of the forecast and the second period of the forecast is less than 1 year, which does not match the period of the annual discount rate. The reason is that the first period of the forecast is not mid-year discount but may be mid-quarter or mid-month discount, which makes the discount methods of the two periods different, Therefore, it is not recommended to use the mid-year discount method when the base date is not the end of the year.