Enterprise valuation models value the company's operating cash flows. We can value the company's operations and subtract the value of all nonequity financial claims (debt)
Equity valuation models value only the equity holder's claim against operating cash flows. We can value the equity cash flows directly
To value a company's equity, latter method is recommended
To value a company's common stock using enterprise DCF:
Value the company's operations by discounting free cash flow from operations at the weighted average cost of capital
Value non-operating assets (excess marketable securities, non-consolidated subsidiaries, other equity investments). Combining the value of operating assets and non-operating assets leads to enterprise value
Identify and value all non-equity financial claims (fixed and floating rate debt, pension shortfalls, employee options, preferred stock) against the company's assets
Subtract the value of non-equity financial claims from enterprise value to determine the value of common stock
Divide equity value by the number of shares outstanding to determine share price
