Explain how you go from projected cash flows to equity value (walk through a DCF).

Question

IBPrep · Accepted Answer

Project unlevered free cash flows over the explicit forecast period and discount them back to the present at WACC.

Calculate terminal value using either the Gordon Growth Method (on final-year UFCF) or the Exit Multiple Method (on final-year EBITDA), then discount that terminal value back to the present the same way.

Explain how you go from projected cash flows to equity value (walk through a DCF).

Answer

More DCF interview questions

Explain how you go from