Module 13 - Cash-Flow-Based Valuation Discounted Cash Flow(DCF FCFF = NOPAT Increase in NOA Or FCFF= OCF Interest exp net CAPEX Firm Value = Present

Module 13 - Cash-Flow-Based Valuation Discounted Cash...

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Cash-Flow-Based Valuation
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Discounted Cash Flow (DCF) FCFF = NOPAT – Increase in NOA Or FCFF= OCF + Interest exp net - CAPEX Firm Value = Present value of expected free cash flows to the firm (FCFF) 4 ) w r (1 4 FCF 3 ) w r (1 3 FCF 2 ) w r (1 2 FCF ) w r (1 1 FCF F 0 V
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Discounted Cash Flow (DCF) DCF valuation of common stock involves 3 steps: 1. Forecast and discount free cash flows to the firm (FCFF) for the horizon period . 2. Forecast and discount FCFF for the post-horizon period, called the terminal period . 3. Sum the present values of the horizon and terminal periods to yield firm value. Resulting value above is for the entire firm. 4. Subtract the value of the firm’s debt (NNO) from the value of the firm. 5. Divide this amount by the number of shares outstanding to yield the estimated per share stock price
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Discounted Cash Flow Model
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Discounted Cash Flow Model —Details
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Discounted Cash Flow Model
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Discounted Cash Flow Model
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Discounted Cash Flow Model
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