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How to Value a Company with the Discounted Cash Flow Model
Motley Fool Money
Limitations of Forecast Period in Discounted Cash Flow Models
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In discounted cash flow models, the forecast period or projection period is crucial as it's where assumptions for revenue are inputted typically for 5 to 10 years. Beyond 10 years, predictions become uncertain due to the difficulty in estimating a company's sales and margins accurately, reducing the confidence in long-term assumptions.
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