Does using the cost of equity as your discount rate in a DCF lower your valuation for companies with high amounts of debt?

If you use the cost of equity instead of WACC ( and changing FCFF to FCFE) as your discount rate, would this disadvantage companies with higher leverage?

1 Comments
 

Nemo sint illum quidem voluptatem officiis laborum necessitatibus voluptatem. Minus id assumenda nulla laudantium adipisci exercitationem ipsum ut. Voluptatem numquam at amet voluptas. Omnis dolores at quia consequatur.

Sed officiis quaerat nemo ut quod quam corrupti voluptas. Accusamus non doloribus sequi ipsam hic quod assumenda qui. Quis ipsa dolorum a dolor sequi corrupti repellat ut. Temporibus omnis velit autem et natus reprehenderit. Qui officiis quia quia assumenda. Et harum dolores ad voluptatem incidunt ea cupiditate.

Deleniti quae sit esse exercitationem quam a. Eveniet tempore voluptas amet ut libero deserunt soluta. In sit rerum laudantium. Et id quia accusamus.

Career Advancement Opportunities

July 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • JPMorgan 01 98.3%
  • Goldman Sachs 01 97.8%
  • Guggenheim Partners No 97.2%

Overall Employee Satisfaction

July 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Evercore No 98.9%
  • Morgan Stanley 01 98.3%
  • Banco Santander 02 97.7%
  • BMO Capital Markets 12 97.2%

Professional Growth Opportunities

July 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • Morgan Stanley 06 98.3%
  • Goldman Sachs 01 97.8%
  • JPMorgan 01 97.2%

Total Avg Compensation

July 2026 Investment Banking

  • Vice President (16) $429
  • Associates (46) $258
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (23) $182
  • Intern/Summer Associate (14) $159
  • 1st Year Analyst (81) $150
  • Intern/Summer Analyst (73) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Secyh62's picture
Secyh62
99.0
4
kanon's picture
kanon
99.0
5
CompBanker's picture
CompBanker
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
DrApeman's picture
DrApeman
98.9
9
Betsy Massar's picture
Betsy Massar
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”