The FCF Model Again perpetuity remains a key assumption Here first you need to

The fcf model again perpetuity remains a key

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The FCF Model Again perpetuity remains a key assumption. Here, first you need to forecast the Free Cash Flows based upon some assumption (a proper growth rate). Discount these seperate FCF to PV. After the forecasted period, estimate a constant growth to find the terminal value. Discount the TV back to PV and add all FCF together. The value achieved will be the TOTAL COMPANY’S VALUE and you will have to deduct the market value of debt from it.
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Estimating Growth Growth remains a fundamental problem. We cannot simply assign a number to reflect as a growth rate. It has to have some essence. There are three ways to look at growth: Historic Look around Estimate a fundamental
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Estimating Growth Expected Growth Rate CAGR SAGR
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Estimating Growth Expected Growth Rate Equity Income Operating Income Retention ratio (1 – Dividends / Net Income) Return on Equity (Net Income / BV of Equity ) Reinvestment Rate (Net Cap Ex+Chng. In WC / NOPAT) Return on Capital (NOPAT / Total Capital)
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