Two possible approaches to valuation discussed in class are (i) the enterprise discounted cash flow method (FCFF) and (ii) the adjusted present value (APV) method. Briefly describe how financial leverage affects the value of a company in each of these methods. Effect of financial leverage on value under the enterprise discounted cash flow method (2 points):

3. Two possible approaches to valuation discussed in class are (i) the enterprise discounted cash flow method (FCFF) and (ii) the adjusted present value (APV) method. Briefly describe how financial leverage affects the value of a company in each of these methods. Effect of financial leverage on value under the enterprise discounted cash flow method (2 points): Effect of financial leverage on value under the APV method (2 points): 3. Two possible approaches to valuation discussed in class are (i) the enterprise discounted cash flow method (FCFF) and (ii) the adjusted present value (APV) method. Briefly describe how financial leverage affects the value of a company in each of these methods. Effect of financial leverage on value under the enterprise discounted cash flow method (2 points): Effect of financial leverage on value under the APV method (2 points)