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Discounted Cash Flow Analysis
Questions/Discussions
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In my experience with DCF Analysis, the PGM calculates terminal value by treating a company's terminal year Unlevered Free Cash Flow (FCF) as a perpetuity growing at an assumed rate.
However, in you DCF Analysis video presentation, you use a company's terminal year Tax-Effected EBIT as a perpetuity. I wonder why? and would like to learn the rationale behind it.
You mention in the video one should consult with the "related modules" for explanation as to why this this is the case (i.e. choosing Tax-Effected EBIT ). Since none of the six self-study packages I have purchased contains the "related modules" ==> I wonder and would appreciate it very much if you would be kind enough to share with me why you think Tax-Effected EBIT is a better perpetuity in the PGM to determine terminal value.
Thank you very much in advance for your assistance in this matter. I look forward to your reply.
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