Brian DeChesare

MAY 3, 2023

The DDM is more grounded because it’s based on the company’s actual distributions and potential future value. And it values the company today based on the present value of its dividends and that potential future value (either the stock price or the Equity Value via the Terminal Value calculation).

Dividends 64

Dividends Terminal Value Enterprise Value Equity 64

Valutico

OCTOBER 20, 2022

Well, the short answer is after that forecast period where we estimate each year’s cash flows then discount them, we add a single number at the end to account for all the theoretical years in the future, called the Terminal Value (TV). Explaining The Terminal Value. How do I calculate the Terminal Value?”

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Weighted Average Cost of Capital Net Present Value 52

Valutico

SEPTEMBER 13, 2023

SMEs can present challenges with DCF due to limited historical financial data, unreliable information, inadequate financial forecasts, and difficulty in determining terminal value. Approximations, negotiations, and considering illiquidity premiums help mitigate these challenges.

Discounted Cash Flow 52

Discounted Cash Flow Comparable Company Analysis Asset-based Approach Intangible Assets 52

Valutico

AUGUST 10, 2023

However, market information required for CAPM, such as beta coefficients and risk premiums, may not be available for SMEs. To solve this, approximations are used, and an illiquidity premium is added to the rate to account for the lack of market for SME shares.

Discounted Cash Flow 52

Discounted Cash Flow Asset-based Approach Intangible Assets Business Valuation 52