Abstract

RODRIGUEZ VAZQUEZ, Verónica Patricia  and  ACA VARELA, Jaquelina Marcela. Discounted cash flow as a valuation method of Mexican enterprises during the 2001-2007 period. Contad. Adm [online]. 2010, n.232, pp.143-172. ISSN 0186-1042.

The objective of this investigation was to evaluate a 50-enterprise sample of the Mexican Stock Exchange by the discounted-cash-flow model for a 7 year period, from 2001 to 2007, in order to compare the results obtained with the market value. To that end, the cash flows were projected with the most recent growth rate of the last known cross-sectioned GDP and the cross-sectioned GDP'S geometric medium, with the objective of knowing which of the two options gives a better estimate of the enterprise's growth rate. We found that, despite the existence of a statistically significant relationship between the calculated values with the FED model and the market values of the enterprises in most of the years and sectors analyzed, the β coefficient was not consistent. On the other hand, we concluded that the cross-sectioned GDP'S geometric medium gave a better estimate of the enterprise's growth rate and as a consequence, a greater lineal association between the market values and the values calculated with the FED model.

Keywords : discounted cash flow; enterprise valuation; market value; Gross Domestic Product (GDP).

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