Discounted Cash Flow (DCF)
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Revision as of 13:21, 12 June 2020 by wiki_crypto>Zeb.dyor (Adding categories)
- From Investopia:
"Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of a company today, based on projections of how much money it will generate in the future.
DCF analysis finds the present value of expected future cash flows using a discount rate. A present value estimate is then used to evaluate a potential investment. If the value calculated through DCF is higher than the current cost of the investment, the opportunity should be considered.
DCF is calculated as follows:
- CF = Cash Flow
- r = discount rate (WACC)"
