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How can the value of an asset be equity?

Sometimes the value of an asset can be used as equity. Please elaborate the condition that can convert asset value into equity.

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sabir-ali

You can value equity in one of two ways:
• By discounting cash flows to equity at the cost of equity to arrive at the value of equity directly.
• By discounting cash flows to the firm at the cost of capital to arrive at the value of the business. Subtracting out the firm’s outstanding debt should yield the value of equity.

Source: http://in.docsity.com/en-docs/Valuation_-_Investment_Management_-_Lecture_Slides_

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