Technical Note | HBS Case Collection | July 2001

Technical Note on LBO Valuation (B): The Equity Cash Flow Method of Valuation using CAPM

by Carliss Y. Baldwin

Abstract

Explains the equity cash flow method of valuation as it applies to leveraged buyouts. Also explains how to implement the changing cost of equity method using the CAPM.

Keywords: Leveraged Buyouts; Forecasting and Prediction; Cash Flow; Cost of Capital; Equity; Valuation;

Citation:

Baldwin, Carliss Y. "Technical Note on LBO Valuation (B): The Equity Cash Flow Method of Valuation using CAPM." Harvard Business School Technical Note 902-005, July 2001.