Understanding Discount Cash Flow
Why do we usually project the first 5 years FCF in a DCF analysis? Why not take just the Terminal Value? Isn’t that the final value forever?
Secondly it seems that you can take the same company and project FCF 10 years out and it will give you a higher valuation.
Doesn’t make sense that a company’s valuation is different with a 5 vs. 10 year projection?
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