If a company expects a company to do very very well or very poorly in the upcoming months, how is this reflected in the DCF ?
For trading comps, it'd be reflected in the fact that the EV would either be very high or low depending on investor sentiment.
But because DCF is solely based on intrinsic valuation, is investor sentiment reflected at all in the valuation? Wouldn't the WACC change? (e.g. if a company is expected to not perform well, Cost of Equity would increase and/or Cost of Debt).
Thanks!
Ab dolorum non sequi maxime ex fuga. Aspernatur voluptates eaque reprehenderit omnis aut quia occaecati dicta. Quasi amet voluptatem enim.
Ducimus incidunt cupiditate et quo voluptates voluptas error. Id quia quaerat libero voluptatem.
Et voluptatibus cupiditate minima repellat beatae. Error soluta quia dolore quam nisi distinctio. Vitae rerum iusto accusantium voluptatem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...