Dear all,
Should I decrease the WACC for a target in the explicit forecast period to reflect maturity or keep it constant? A decrease may be difficult to substantiate, whereas a constant discount factor would be overly simplistic?
By constant I mean, ie 10% over 10 years with the change only reflecting the year of discounting, but nothing more.
Much appreciate the help!
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You are discounting based on the cost of capital you would be investing today so you keep WACC constant
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