Calculation Of NPV


3 Answer(s)


In DCF the NPV is used to calculate the present value of future cash flows. It does not take into account how the company has been funded.

The impact of initial investment / capital structure of the company is taken into account while using the CAPM formula were we factor in the cost of debt and cost of equity.

But essentially the value of a company is dependent on its future cash flows not how it is funded.

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