WACC vs. Equity Residual Method
Hi!
I was just wondering if Discounted Cash Flow using WACC and Equity Residual Method should yield the same result? I can't seem to get the same value.
Thanks!
Not sure what "Equity Residual Method" is. Do you mean "Residual Income," which is a similar concept to "Economic Profit" or "Economic Value Added?" If so, the short answer is that, in theory, yes, but, in practice, it is hard to do.
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