Tuesday, January 20, 2009

Methods to Calculate Discount Rates - DCF

Discounted Cash Flow Analysis can be broken down into three sections:1. Forecast free cash flows for a given period (5 to 10 years generally, and depending on the industry)2. Discount free cash flows using some discount rate3. Calculate the Net Present ValueA question you will probably encounter during interviews will be: What discount rate should you use when performing a DCF?According to Wet

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