Achieve 1-year target price by DCF?
For dcf valuation, it's my understanding that I will reach a fair value of the stock If I want to achieve a 1-year target price, do i need to discount the future cash flow to one year from now or do I just multiple the fair value by a growth rate? Thanks!
bump
DCF is present value today of future stock price. To get price one year from now you go up by cost of equity.
Does that mean after I get the present value today of future stock price, I multiple it by (1+cost of equity)? Thanks.
Yes, PV*(1+cost of equity).
Thank you for your reply.
Mollitia sunt totam incidunt mollitia. Praesentium odit ipsum doloremque quis vitae minima qui.
Facere et aliquid voluptates corrupti ut beatae. Vel porro quo ipsum rem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...