Banking

Discounted Cash Flow Analysis

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Executive Summary

It can be hard to understand how stock analysts come up with "Fair value" for companies, or why their target price estimates vary so wildly. The answer often lies in how they use the valuation method known as discounted cash flow (DCF). However, one don't have to rely on the word of analysts. With some preparation and the right tools, one can value a company's stock using this method. This tutorial will show one how, taking step-by-step through a discounted cash flow analysis of a fictional company.

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