AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
How to Value a Company with the Discounted Cash Flow Model
Motley Fool Money
How to Discount Your Free Cash Flow
5min Snip
00:00
Summary
Transcript
Episode notes
For the terminal value, you have to pick your terminal growth rate. You can't have your year ten growth rate in the last year of your model, 50 percent and then all of a sudden, year eleven, it's two percent. It doesn't work. So we calculated the free cash flow that we calculated fools, which we just said was no path in this model, minus reinvestment. That's free cash flow available to debt and equity holders. Subtract debt. Any cash that is left over after we pay back our debt now belongs to the equity holders. So we have this present value of the terminal value,. We subtract debt and we add cash. Now we have equity
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode