Bridge over ocean
1 March 2003 Financial Analysts Journal Volume 59, Issue 2

FEVA: A Financial and Economic Approach to Valuation

  1. Xavier Adserà
  2. Pere Viñolas

Traditional valuation methods (economic value added, discounted cash flow, and Modigliani and Miller models) are mathematically equivalent and thus should provide the same result when the same inputs are used. They do not. Because these methods focus on different value drivers, we suggest an alternative valuation method that provides the adjustment necessary to produce consistent results. We also propose a new corporate valuation method (“financial and economic value added,” or FEVA) that integrates the EVA, DCF, and MM approaches and allows a detailed analysis of financial and economic corporate value drivers.

Read the Complete Article in Financial Analysts Journal Financial Analysts Journal CFA Institute Member Content

We’re using cookies, but you can turn them off in Privacy Settings.  Otherwise, you are agreeing to our use of cookies.  Accepting cookies does not mean that we are collecting personal data. Learn more in our Privacy Policy.