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The Relevance of Historical and Forecast Periods in a Business Valuation

Equilest

2023–2027) Year Revenue ($M) EBITDA Margin EBITDA ($M) CapEx ($M) FCFF ($M) 2023 11.0 Assumptions Forecast Period: 2023–2027 WACC: 10% Terminal Growth Rate: 3% Final Year FCFF (2027): $1.8M Assumptions Forecast Period: 2023–2027 WACC: 10% Terminal Growth Rate: 3% Final Year FCFF (2027): $1.8M

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The Dividend Discount Model (DDM): The Black Sheep of Valuation?

Brian DeChesare

The DDM is more grounded because it’s based on the company’s actual distributions and potential future value. And it values the company today based on the present value of its dividends and that potential future value (either the stock price or the Equity Value via the Terminal Value calculation).