Tuesday, 2 March 2021

VALUATION: DISCOUNTED CASH FLOW EXPLAINED

 


 


VALUATION: DISCOUNTED CASH FLOW EXPLAINED

 

If I agreed to pay you £100 in 10 years time and interest rates are 2% then that £100 in 10 years time is worth only £82.03 today because if you invested £82.03 in the bank and they paid you 2% interest you would have £100 after 10 years.

 

You do of course need to have earnings figures for each of the next, say, 10 years.

1 comments:

Keep it clean, keep it lean