Why doesn't DCF analysis also take shareholders' equity into account?

Let's assume company X has free cash flows of $1,000 per year for the next few years (never mind WACC and the growth rate for the sake of this example) and a similarly low terminal value. Theoretically, even if shareholders' equity is $1 million (let's say your only asset is a million-dollar building... show more Let's assume company X has free cash flows of $1,000 per year for the next few years (never mind WACC and the growth rate for the sake of this example) and a similarly low terminal value. Theoretically, even if shareholders' equity is $1 million (let's say your only asset is a million-dollar building with no mortgage on it), the company would only be worth about $10,000 under a DCF analysis. I know this scenario is unlikely, but even under more reasonable circumstances, there could be considerable discrepancies between a company's value based solely on its projected cash flows and its value base on cash flows AND equity.
So my question is basically why doesn't this highly popular method take equity into account and why don't any valuation models I know of (comparables, precedent transactions and LBO) directly take a company's hard assets/equity into account in determining a value? Thanks a lot
Update: by the way, I'm no expert.. by all means correct me if I'm wrong in anything I said
Update 2: "THEORETICALLY." I used it as an extreme example
"I know this scenario is unlikely, but even under more reasonable circumstances"
geez...
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