REAL VALUE, RATIONAL MODEL, D.C.F.: A REPLY Available to Purchase

Recent articles regarding investment valuation and appraisal published in Journal of Valuation have included a number of commentaries which either review or analyse previous contributions. The recent reviews of Baum and Yu, and the comments of Fraser and Greaves, warrant a reply from one of the instigators of these models which have been reviewed or examined. In this reply, a few minor points are answered. The major thrust of Baum's analysis, that a place exists for both DCF and Real Value techniques, is confirmed on the grounds that both models are reconcilable and the existence of both will help towards a general understanding of contemporary techniques. This paper argues for a change in direction in the debate, from construction to use of models, and for this reason the contributions of Fraser are seen as significant. Fraser's views on the use of models are concluded to be conflicting and it is suggested that the debate should be directed to what ought to be, with less importance being placed on what is actually, happening. Only in this way can change, if thought to be desirable, take place.