This paper derives a closed-form expression for the expected discounted value of aggregate cash flows when arrival times follow a Poisson process but both the time horizon and the number of arrivals are finite. The result provides a tractable analytical formula for the expected discounted sum...

This study compares the estimation errors of several present value discounting conventions (end-of-year, mid-year, and the more recently proposed harmonic mean convention) for a uniform distribution of intra-period cash flow - continuous and discrete. Our results show that the mid-year...

Current theories of the discount rate have a theoretical basis focused on risk; risk-free rate and risk premium. The basic component of the discount rate, the risk-free rate as purely empirical has a natural infirmity which consequently weakens the final theory. Similarly, the risk premium...

Volumes of oil reserves are important indicators of energy availability in the future since it is still the world’s main source of energy. In this paper, we estimate the oil reserve volume under oil price uncertainty using the traditional discounted cash flow (DCF) and the real options theory...

The objective of this paper is to analyze the suitability of the Total Market Return approach within the requirements of the capital asset pricing model, and for the purpose of business valuation, particularly in light of its endorsement by the institute of German auditors (IDW). First, we...

The objective of our paper is to analyze, how valuation practice deals with inflation especially for the terminal value, and how company value is influenced by assumptions set by practitioners. For that reason, we examine how vulnerable companies could be regarding struggles to pass on...