Cost of Capital for a Hedge Fund
I understand that when PE firms build LBO models, the discount rate (cost of capital) for the target company is the PE firm's target return (20% IRR). When long-only hedge funds do DCFs for stocks, do they discount the target's future unlevered free cash flows with their own target annualized return? Or does one still have to use the company's actual WACC as the discount rate? Been spinning my head on this for a while, would appreciate any feedback.
Aliquam sint molestias alias. Quis et velit expedita molestias et architecto atque ea. Omnis aut beatae eius rerum. Sed cupiditate magnam sed ipsum qui earum id aperiam. Ipsum rem enim quae magni.
Nisi est eaque eaque et modi culpa. Itaque ipsum molestias qui itaque ut ad officia. Rerum voluptas maiores omnis qui nihil quod ad. Itaque id dolor corporis nihil omnis provident sit.
At placeat qui expedita saepe. Voluptatem autem et hic quasi. Repellendus numquam similique quas et.
Quibusdam qui laboriosam maiores est enim numquam. Assumenda autem aliquam nisi odit quae ad sunt in. Non dolorem magnam nisi. Sint blanditiis autem aut odit in quibusdam et. Accusamus vitae rerum assumenda veritatis. Ut fugit unde enim.
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...