DCF without forecasts

DCF without forecasts

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Article ID: iaor1995841
Country: United Kingdom
Volume: 22
Issue: 3
Start Page Number: 221
End Page Number: 235
Publication Date: May 1994
Journal: OMEGA
Authors:
Keywords: financial
Abstract:

DCF models are very widely used despite the impossibility of forecasting cashflows. However, the traditional DCF methodology could be adapted, so that it becomes nothing more than a device for evoking knowledge and improving conceptual models, leading to the formulation of investment intentions. In secondary asset-selection contexts, DCF calculations could facilitate sub-optimization. These adaptations find theoretical support in pragmatism and meta-theory.

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