7/13/15

Hey all, quick question about DCF valuation. If you're valuing a company right now (mid-2015), do you discount cash flows back to 2015, or do you account for the fact that it's the middle of the year? In other words, should you discount back to 2015.5?

Thank you all in advance!

Comments (5)

7/13/15

When are you predicting "the deal" closes?

Do you want to know what the company is in theory worth tomorrow or at the end of a sellside process?

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7/13/15

Right now I'm looking to see what the company is worth tomorrow, which is why I'd think to use mid-year discounting--what's the appropriate way to approach this?

"True humility is not thinking less of yourself; it is thinking of yourself less."

7/13/15

You discount by the number of years in your period. It shouldn't matter when you start. If you know ahead of time that your discount period will be a fraction of a year (e.g. September 1, 2015 through February 28, 2026) then you utilize a fraction (e.g. 10.5 years).

7/13/15

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"True humility is not thinking less of yourself; it is thinking of yourself less."