How do I discount Free Cash Flow to the Firm (FCFF)?


Discounted free cash flow for the firm (FCFF) should be equal to all of the cash inflows and outflows, adjusted to present value by an appropriate interest rate, that the firm can be expected to bring in during its lifetime. It’s a form of time value analysis – how much an investor would pay today to have the rights to all future cash flow.


Free cash flows aren’t a readily available figure. Financial analysts have to…



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