PURPOSE To understand the long-term economic implications of key pathways for financing a medical school education. METHOD The authors calculated the net present value (NPV) of cash flow over a 30-year career for a 2013 matriculant associated with (1) self-financing, (2) federally guaranteed loans, (3) the Public Service Loan Forgiveness program, (4) the National Health Service Corps, (5) the...

Discounted cash flow (DCF) is the most accepted approach for company valuation. It is well grounded in theory and practice. However, the DCF approach, which is commonly used for traditional companies valuation, presents a number of serious weaknesses within the Internet companies’ context. One of these weaknesses is tackling the uncertainty that characterize future cash flows of these companies...

We provide novel evidence on which theories best explain stock return anomalies by decomposing anomaly portfolio returns into components driven by the underlying …rms’cash ‡ows or their discount rates. For each of …ve well-known anomalies, we …nd that cash ‡ow shocks explain more variation in anomaly portfolio returns than discount rate shocks. The cash ‡ow and discount rate components of each ...

The study develops a model from which an option-adjusted spread approach is utilized for pricing individual mortgage servicing contracts. The pricing model is comprised of a stochastic interest rate process, an exogenous prepayment function and an assumed servicing cost, all of which jointly determines the contract’s future net cash flows and the rate at which to discount these cash flows. Then...

The cash flows of technology-based companies show high degrees of uncertainty. As traditional valuation methods can hardly capture these characteristics, they are insufficient for valuing these kinds of companies. On the contrary, real options theory can quantify the value associated with management flexibility, growth opportunities, and synergies. This chapter assesses the corporate value of a...

The basic financial purpose of corporation is creation of its value. Liquidity management should also contribute to realization of this fundamental aim. Many of the current asset management models that are found in financial management literature assume book profit maximization as the basic financial purpose. These book profit-based models could be lacking in what relates to another aim (i.e., ...

We analyze whether the diversification discount is driven by the book value bias of corporate debt. Book values of debt may be a more downward biased proxy of the market value of debt for diversified firms, relative to undiversified firms, as diversification leads to lower firm risk. Thus, measures of firm value based on book values of debt undervalue diversified firms relative to focused firms...

there are several methods for measuring the performance and value of a company. these are, earnings per share, earnings growth rate, dividend per share, rate of return on equity and free cash flow. the purpose of this article is to show that all these criteria have some deficiencies and will introduce a new criterion called economic value added (eva). eva is computed by subtracting capital char...

The spline-based models are widely used in practice to estimate the term structure of interest rates from a set of observed coupon-bond prices. The most popular method can be traced back to McCulloch (1971). Assuming that the price of a bond is equal to the present value of its future coupon payments and redemption, cash flows are regressed on a set of basis functions to estimate discount funct...