Modeling question for valuation during fiscal yeras
Let's say it is now september 8th 2014, you have forecast-cash flows in monthly tranches for months october-december 2014 in the amount of 10 and budget-cash flows in yearly tranches for years 2015-2017 in the amount of 200 and 250 for the terminal value cash flow. WACC is 10%.
How do you incorporate the monthly tranches in your valuation to get a value for september 30th 2014.
Any help would be appreciated!
Thanks!
Solve for r to get the discount rate you should use on the months: (1+r)^12 = (1+10%).
Then for Oct you use 1/(1+r), Nov (1+r)^-2, Dec (1+r)^-3, etc.. The yearly cashflows you can discount just like a normal DCF at 10%.
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