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Equity valuation by free cash flow to the equity

This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

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September 16, 2021 at 12:06 pm #635825
ruchikapg
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When we use free cash flow to the equity, we should discount by cost of equity (Ke). Is that Ke, Keg(Geared) or Keu (Ungeared ) ?
September 16, 2021 at 5:26 pm #635841
John Moffat
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We always discount the free cash flow to equity by the actual cost of equity (which, if the company has gearing, if the geared cost of equity).
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