The impact of public subsidies in equity valuation Abstract

The impact of public subsidies in equity valuation

Abstract:

In this paper we analyze how to incorporate in firm equity valuation the presence of public subsidies. This task can be performed with different alternatives with direct and indirect methods of equity valuation; if properly used we get the same result. We had to adjust cash flow and the required rate of return. This work describes these alternatives and shows a generic example of application.

Keywords: firm valuation, equity valuation, public subsidies, weighted average cost of capital