Continuing Value Calculation with Discounted Cash Flows Method: An Application Example for Tekart Tourism Establishment Whose Shares Are Dealt in Istanbul Stock Exchange

Valuation is stated as monetary value belonging to firm assets (Verginis & Taylor, 2004). According to M. L. Rock, R. H. Rock, and Sikora (1994), valuation is the answer of the following questions: What is the maximum price that will be paid for the firm? What are the risk areas? What are the results of cash flows, profitability, and balance-sheet? Chambers (2005, p. 5), on the other hand, estimated a probable price that will be paid for the goods and service at a specific time. For the calculation of continuing value (CV), Verginis and Taylor (2004) used discounted cash flows (DCF) method and Önal, Karadeniz, and Kandır (2005) used economic profit method. Kırlı (2005) suggested Continuous and Constant Growing Model (Gordon Model), Value Driver Model, and Economic Profit Model. In this study, DCF which is suggested by Önal et al. (2005) and Verginis and Taylor (2004) is used for the aim of determining CV of the firm at issue. In this study, analyses are made by using the financial statement data of a tourism business whose shares are dealt in İstanbul Stock Exchange. In consequence of the calculations, CV of the examined firm is found to be 7,485,402 TL and firm value is found to be 15,195,366 TL.

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