# Tag Info

## Hot answers tagged dcf

2

Assuming you mean $P_t=S_T$, that you are pricing under the risk neutral measure $\mathbb{Q}$ and introducing a discount factor $e^{-\int_0^T{r(t)dt}}$, your equation can be rewritten $-$ where $\{\mathcal{F}_n\}_{n\geq0}$ is an appropriate filtration: \begin{align} \mathbb{E}^{\mathbb{Q}}\left[V_T|\mathcal{F}_0\right]=\mathbb{E}_0^{\mathbb{Q}}\left[V_T\... 2 I think that what you want is to convert an annually compounded interest rate to a monthly compounded interest rate, right?\left(1+\frac{r_{monthly}}{12}\right)^{12} = (1 + r_{annual})r_{monthly} = 0.09568969 Notice that the monthly compounded rate would have to be lower than the annual rate of 10% because you are compounding the proceeds each ...

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Lucky for us, the method you’re describing is unnecessarily complicated. M&M state that distributions have no impact on firm value, so why would it in your model? Check out Valuation Models: An Issue of Accounting Theory by Stephen Penman. In it, he shows how the Free Cashflow model is only valid insofar as it matches the Dividend Discount model via ...

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https://www.10xebitda.com/hedge-fund-presentations/ - HF decks on stocks they invested in. I'd guess you can find some DCF models or 'more complex models' for valuation in some of these. HTH.

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There's plenty of resources on the internet but I used to use during a banking internship: https://corporatefinanceinstitute.com/resources/templates/excel-modeling/dcf-model-template/

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Correct calculation of perpetuity for the next year is following

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The discount rate (for interbank trades) is broadly treated as the risk free rate. So at worst you could obtain this rate for no risk, making it the minimum rate of return. No instrument should yield less than this. NPV is not about how the universe evolves, it's about the fair value of something today. If you were to dispose of an asset, or make a price, ...

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You don't provide enough information. Yet, if you provide a little more information it might be possible. In theory -- one may recreate a statement for the source and use of funds (i.e., delta balance sheet) from an income statement and cash flow statement. The following adjustments provides a simplified example of the IFRS balance sheet taxonomy, and it is ...

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You should use whatever currency in which the debt is denominated. Specifically, since it is the EUR currency and interest rate risk associated with the debt, some sort of EUR curve should be used. Theoretically, if you are looking for the present value in USD, although the debt is denominated in EUR, you could convert future payments at the forward ...

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Under GGM dividends are used, under the assumption of constant growth. You're given FCF under the assumption of constant growth. So you could use FCFF or FCFE models. Since the question is asking for the value of the corporation, you will want to use the FCFF model $Firm Value = \frac{FCFF_1}{(WACC-g)}=\frac{FCFF_0(1+g)}{(WACC-g)}$

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Your last cash flow is not correctly expressed as you forgot the $(1+r)^{-5}$ when you reinjected. A $t= 5$ (in 5 years), your PV of the remaining cash flows is: $F_5 \sum_{k=1}^\infty (\frac{1+g}{1+r})^k$. That is the formula for receiving a cash-flow $F_5$ growing at $1+g$, discounted at $(1+r)$ each year, receiving the first cash-flow in year 6. Now ...

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