Abstract
Correctly applying the valuation methodologies is important. Sabal (2007), using a well-designed example, shows that various methods give identical results, and asserts that APV is more convenient for the emerging market. However, a few issues are questionable which we intend to clarify, including (1) the evidence regarding target debt ratio; (2) the relationship between the WACC/APV and the capital structure; (3) the inconsistencies in the CCF application; and (4) why using the framework by Fernández (2004) does not necessarily prove Sabal's assertion. Our study and Sabal's work are both integral parts in contributing to the better understanding of business valuation.
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