Is there a justificed P/FCFE ratio just as there is one for P/E, P/BV, and P/S? I’ve seen it alluded to but never seen a way to calculate for it. Thanks.
no sir, none justified
thanks northeastern–for this Q and for all the helpful posts you’ve provided over the course of the last few weeks and months. best of luck to you these coming weeks.
It is simply the capitalized FCF model (depending on the type of “cashflow” you want to use, i.e., either FCFE, EBITDA, etc.) over the type of cashflow used. For instance, if you use FCFE: [FCFE * (1+g)] / (r - g) all over FCFE
right thats wht i saw in the text. dont see how thats justified…it looks like the market…unless the fcfe in the numerator is derived from fundamentals rather than from the B/S and I/S?
It assumes FCFE is based on fundamentals