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Discount Rate Myth 3: The Discount Rate cannot change in a DCF!
Published 2 weeks, 2 days ago
Description
In this session, the third of five on discount rate myths, I look at the widely held view that the discount rate in a DCF is a constant. In reality, discount can and should change over the forecast period of a DCF to reflect changes in business, life cycle and profitability that you see in the company that you are valuing. I suggest a simple framework for thinking about how to make these changes.
Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/DiscountRateMyth3.pdf
Blog Post: http://aswathdamodaran.blogspot.com/2016/11/myth-43-d-cannot-change-over-time-in-dcf.html
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