What Does Adjusted Present Value Mean?

rjghmn's picture
Rank: Baboon | 110

An Adjusted Present Value (APV) valuation is very similar to DCF valuations, however there are several differences between the methodologies.

The APV is the net present value of a firm that is financed solely by equity, plus the present value of financing benefits.

APV = Unlevered NPV Cash Flows (Including Terminal Value) + NPV of Financing Side Effects (ex: Interest Rate Tax Shields)

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