5 Questions
When projecting Free Cash Flow (FCF) in a DCF analysis, which historical data should be considered for creating assumptions?
Historical interest expense
What factors play a role in determining the length of the projection period in a DCF analysis?
Predictability of FCF
Which variables are commonly sensitized in a Discounted Cash Flow (DCF) analysis?
IRR and EBIT margins
What method is typically used to calculate the cost of equity in financial valuation?
CAPM
Which market risk premium range is most appropriate to use when calculating the cost of equity?
2%-3%
Test your knowledge on the relevant factors for creating assumptions in projecting Free Cash Flow (FCF) for a Discounted Cash Flow (DCF) analysis, as well as the factors that determine the length of the projection period. Multiple-choice questions will challenge your understanding of historical data, sector analysis, FCF predictability, and business model evaluation.
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