DCF Discounting Issue

oreomaster231's picture
Rank: Chimp | 2


Why does the time coefficient approach yield a different result vs the first method below? Can`t see the forest from the tree..

Method one:
Step 1 NOPAT * (1+G)/ WACC-G
Step 2 Step-two/1+WACC^5

EV 43.242

Method two:
NOPAT / (WACC-G)*Time coefficient of the last period

EV 43.705

(All input variables were held constant)

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Jun 3, 2015