DCF - Bamboozled
I’ve been asked to build a 10 year DCF on an annual basis running from 30 June 2024 (latest balance sheet date) to 30 June 2034. The complexity is however they have asked for me to calculate the NPV assuming a 31 December 2024 valuation date and 31 December 2034 exit date. Could someone please help me understand how I can do this? I’m getting confused as all my cash flows are annual on a 30 June financial year end basis and I have no idea how to discount these back. Any help would be appreciated!
Maybe use the yearfrac function to get the correct discount rate
Never done this so just speculating. Estimate out to Dec24 then re-project annual out 10 years.
Problem isn’t so much the discount rate, but that the valuation date is 6 months from now, so need to get your projections on the same time period
1) Project out the financials on a FY basis out to FY’35.
2) Calendarize them (i.e., CY’24 is the average of FY’24 and FY’25)
3) Use your new CY financials to run the DCF.
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