Reference no: EM133001977

Problem 1: How is an economic asset such as a stock, bond, or firm valued?

1.Identify the size, timing, and risk of future cashflows available to the owner and discount these to the present.
2.Add up the book value of all of the assets on the balance sheet.
3.Add up the book value of all of the assets on the balance sheet and subtract the sum of                                                                  4.the liabilities.
5.Add up all cash flows that an owner will receive.