APV
Business & Finance abbreviation · Finance
| Stands for | Adjusted present value |
|---|---|
| Categories | Business & Finance |
APV stands for Adjusted present value, a finance abbreviation.
Valuation method that values a company or project first as if it were financed entirely with equity, then adds the present value of financing side effects, chiefly interest tax shields, and subtracts expected costs of financial distress. It is useful when leverage changes over time.
Example: Because the buyout debt is repaid quickly, the bank used APV rather than a constant-WACC DCF.
Usage notes
Stewart Myers introduced APV in a 1974 paper. The method is favored for leveraged buyouts and project finance, where the capital structure is far from stable, and it makes the value contributed by financing decisions explicit rather than burying it in the discount rate.
Related abbreviations
More finance abbreviations
- ABL – Asset-based lending
- APA – Asset purchase agreement
- ARR – Annual recurring revenue
- ATM – At-the-market offering
- AUM – Assets under management
- CAGR – Compound annual growth rate
- CapEx – Capital expenditure
- CAPM – Capital asset pricing model
- CCC – Cash conversion cycle
- CIM – Confidential information memorandum
- CVC – Corporate venture capital
- D/E – Debt-to-equity ratio