What are the most common DCF valuation models?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What are the most common DCF valuation models?
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Step 1
There are different types of DCF valuation models such as:
1.) BY using the terminal value technique the valuation of the company can be computed. In this technique, all the free cash flow of the project has to be considered while computing the valuation
2.) the FCFF technique can also be applied for the valuation of an entity. Here FCFF stands for forecasted free cash flow to the entity or firm
3.) the equity share price of the company can also be computed to reach to discounted cash flow
4) By discounting the terminal cash flow and initial projected period the DCF valuation can be done
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