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Discounted Cash Flow Technique:

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Bring all future cash flows to a NPV Discount rate is determined by the inflation rate(opportunity cost of money) and the risk premium.

The Discount rate is technically the weighted average cost of capital


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It the weighted cost of how the company is financed. It reflects the minimum return required for the company to satisfy its current liabilities to creditors, owners and providers of capital. This is an indicator of the risk premium and the cost of money market interest rate

Comparable company analysis


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Using financial ratios like P/E earning per share is money available for dividend/no. Of shares. EV/EBITDA good for use comparing companies because it is not based on the capital structure of the company. i.e how the company is financed through debt or equity EV takes into account the cost of paying off the debt of the company.

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