Applicability test, cash-based valuation approach for port concessions
| Applicability test | Cash-based approach valuation | |
|---|---|---|
| Cash-flow based – Free cash flow from the firm (FCFF) | Cash-flow based – Free cash flow from the equity (FCFE) | |
| Applicable to concession valuation? | High | High |
| Rationale | • Widely used to value companies and to price IPOs and other financial assets • Considers cash flows available to debt and equity holders | • Widely used to value companies and to price IPOs and other financial assets • Only considers cash flows available to equity holders |
| Applicability test | Cash-based approach valuation | |
|---|---|---|
| Cash-flow based – | Cash-flow based – | |
| Applicable to concession valuation? | High | High |
| Rationale | • Widely used to value companies and to price IPOs and other financial assets | • Widely used to value companies and to price IPOs and other financial assets |
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