4min chapter

We Study Billionaires - The Investor’s Podcast Network cover image

TIP515: The Little Book of Valuation by Aswath Damodaran

We Study Billionaires - The Investor’s Podcast Network

CHAPTER

The Basics of Accounting

People prefer to consume today rather than consuming at some point in the future. A promised cash flow in the future may not be delivered so there is risk in waiting. The further out into the future we expect the cash flows the lower the present value of those cash flows. This is why growth companies are much more sensitive to increases in interest rates relative to value companies.

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