Equidam

APRIL 26, 2025

Furthermore, any quantitative valuation method, particularly the Discounted Cash Flow (DCF) approach, is highly sensitive to the underlying assumptions about growth rates, discount rates, and terminal values. Beta measures the volatility of the company relative to the market. we use a range of 0.1%

Discounted Cash Flow 59

Discounted Cash Flow Terminal Value Book Value Beta 59

Valutico

OCTOBER 20, 2022

Well, the short answer is after that forecast period where we estimate each year’s cash flows then discount them, we add a single number at the end to account for all the theoretical years in the future, called the Terminal Value (TV). Let’s pause here to acknowledge the big assumption that ‘interest rates will be 10% every year’.

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Weighted Average Cost of Capital Net Present Value 52

Equidam

APRIL 22, 2025

10] , [23] , [2] Discount Rate: The rate used to discount future cash flows is typically the cost of equity, calculated via the Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. [23] to 2.5% [23] , [2] ) to ensure mathematical validity. [2]

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64

Equidam

APRIL 22, 2025

” [1] [2] [4] [15] [19] It estimates a future exit value (often based on projected earnings and industry multiples) and works backward, using the high ROI targets VCs require (due to portfolio risk), to determine what the company could be worth today to justify that future return. [15]

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52