A DCF model projects a company’s future cash flows, discounts them to today’s value, and produces an estimate of what the business is intrinsically worth. It is the core analytical tool in DCF valuation, the method used by investment banks, equity research analysts, and corporate finance teams to value companies based on fundamentals rather than…
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What Is ROIC Fading and How Do Terminal Multipliers Work?
The ValueModel checks whether your terminal multiplier is too high and you chose the right ROIC fading. Related Valuation Mistakes articles
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Porter’s Five Forces: Definition, Model & Analysis
For every organization, it is the utmost importance for strategists to enhance long-term profits. Strategy consultants often use Porter’s five forces as the framework or starting point, when making an evaluation of a firm’s strategic position.
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How to Build a DCF Model: Step-by-Step Tutorial
A DCF model projects a company’s future cash flows, discounts them to today’s value, and produces an estimate of what…
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What Is the Gordon Growth Model?
The Gordon growth model, or GGM, is used to calculate the intrinsic value of a stock from future dividends. The model only works for companies that pay out dividends, which have a constant growth rate.
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What Is Cost of Equity?
To compensate for the risks that shareholders take, firms pay them in return. The theoretical return the firm pays its shareholders is known as the cost of equity. In other words, the cost of equity is the rate of returns a firm pays to its shareholders.
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Coca-Cola Valuation: What Really Drives Revenue (It’s Not Soda)
Coca-Cola is the king of beverages, but can it sustain its reign in a health-conscious era? Explore how it’s adapting to shifting consumer trends and market demands.
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DCF Valuation: The Complete Guide to Discounted Cash Flow Analysis
A DCF valuation (discounted cash flow valuation) estimates what a company is worth today by projecting its future cash flows…
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What Is Time Value of Money?
Time value of money describes how the sum of money that you hold currently is worth more than the equivalent sum in the future.
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Growth CapEx vs Maintenance CapEx: What’s the Difference?
Understanding the difference between growth CapEx and maintenance CapEx is essential for accurate company valuation and financial analysis. Confusing these…
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