Oceňování, 2021 (vol. 14), issue 3

Articles

Problems in justifying the accuracy of projected Free Cash Flow DCF-based valuations

Jaroslav Brada

Oceňování 2021, 14(3):3-20 | DOI: 10.18267/j.ocenovani.263  

The paper has shown by which procedures the correctness of the constructed plans of the drainable FCFs in two-phase DCF methods can be disassembled. Using the falsification principle (K. Popper), it is reminded that the correctness of the constructed Free Cash Flow FCF) cannot be known and confirmed. The only logically incorrect plan of the constructed FCF can be known. Some ways of misrepresenting the size of the FCF from economic reality are presented.

Analysis and evaluation of the approach to the cost of capital and capital structure in the Czech expert opinions on the business valuation - Part 2

Pavla Maříková, Milan Dlabaja

Oceňování 2021, 14(3):21-36 | DOI: 10.18267/j.ocenovani.264  

The aim of the second part of the article is to verify on a sample of published expert opinions how large errors may occur due to an incorrectly determined capital structure or the use of an inappropriate reagental function in a discount rate. The analysis in the examined sample showed a percentage error in the net value from the main operation from - 59% to + 32%, for remote results even up to + 298%. It turned out that the error is large even with the correct tuning of the capital structure, if an inappropriate reagent function is used to recalculate the cost of equity. The largest range of errors was based on assessments with an inappropriate reagental...

Estimation of capital structure for the purposes of market valuation of a company in the conditions of the Czech Republic - Part 2

Pavla Maříková, Andrej Tóth

Oceňování 2021, 14(3):37-69 | DOI: 10.18267/j.ocenovani.265  

The aim of the article is based on data from the Amadeus database to find out to what extent it is appropriate to take over the average indebtedness of companies on foreign capital markets for the valuation of companies operating in the Czech Republic, which are in most cases non-traded companies. The second part of the article focused on three sectors: manufacture of machinery, manufacture of pharmaceutical products and construction. The capital structure of companies in the Czech Republic, Poland, Germany, France and the United Kingdom was examined.The analysis shows that in European countries, non-traded companies are significantly less indebted...

Start-up valuation: an overview of valuation approaches and the effect of a new capital infusion on an enterprise value of a start-up

Michal Novák

Oceňování 2021, 14(3):70-85 | DOI: 10.18267/j.ocenovani.266  

This article describes approaches and methods related to venture capital valuation namely, start-up valuation. New venture value concepts have emerged within venture transactions. The pre-money valuation shows the value of the start-up before new capital infusion, while the post-money valuation shows the value of the start-up including a new capital infusion. Approaches of venture capital valuation (VCV) are, in principle, coincident with approaches of public equity valuation. Four approaches of VCV can predict the start-up value in two directions of future expected earnings, the first direction - post-money value including a new capital infusion and...