ACTG 3000 Lecture Notes - Lecture 7: Fair Market Value, Tax Shield, Growth Factor

• School: York University
• Department: Accounting
• Course: ACTG 3000
• Professor: Douglas Kong

Document Summary

** do not read the chapters in the book. Just read the cpa articles posted on cmd* Midterm: two mini cases: 2 hours 45 mins. A valuation is done for a certain point in time since market trends can change. Enterprise value (ev: this is the value available to the stakeholders of a business, cash is a redundant asset therefore subtracted in this equation, ev = market cap + debt + minority interest cash. We want to known discounted cash flows. Cost of capital: cost of debt interest costs related to getting the debt * need to look at after tax effect, cost of equity there are three components 1. Market risk premium (these numbers would be given to us: ^ must always account for industry specific risks when looking at cost of equity (look at this for group project) example: small business vs big ones etc.