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.
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