Explore BrainMass

PV, FTE and WACC Comparison

Compare and contrast the APV, FTE and WACC approaches to valuation.

Solution Preview

Three methods are proposed for valuation of levered firms:
- The APV (adjusted present value) approach,
- The WACC (weighted average cost of capital) approach and
- The FTE (flow to equity) method.

Studies [1] show that WACC and APV are two completely ...