Hi sir, i wonder why for the valuation of the firm, we do not need to discount using its WACC of 11%...?
Secondly, when we calculate the free cash flow for years 20X5 to 20X8, shouldn't we calculate their present values...?
Thanx...
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Wurall Jan 2004
11y ago#1We are discounting - when there is an inflating perpetuity we use the growth model to calculate the PV.
Why would we want to calculate the PV's for the years 20X5 to 20X8? Note (k) of the questions wants us to calculate the value in 4 years time.
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