NPV, DCF valuation
1) what is the difference between NPV and DCF valuation?
From my deduction
in NPV you use DCF to discount all the future cash flow and subtract the initial investment
IN DCF valuation, you also use DCF to discount all future cash flow and end up with a thing call enterprise value
so does it mean that NPV = enterprise value - initial investment?
and then enterprice value = equity + debt - cash
so finally is it NPV = equity + debt - cash - initial investment?
2) how should i interpret enterprise value?
if enterprise value = 160, equity = 100, debt = 80, cash =20
then 160 = 100 + 80 -20
if this company want to be sold at 120, is it worth to buy it??
3) BTW, a side question, when you calculate the dividend payout ratio, that is dividend per share/ earning per share, should i use basic or dilute EPS?