How to calculate equity value using Discounted Cash Flow (DCF)?


1 Answer(s)


Good question. There are only 2 ways to fund a business operations - equity and debt. Now when you are buying a company you are focused on the company's operational ratios and assume that debt can be paid of with existing cash or by infusing new cash in the company. Other liabilities like lease, electricity, payables etc can never be fully paid off and will always remain as long as the business is a going concern.