Corporate Valuation

AFM

Sir, here why are we discounting the cash flow with 13% even though the cost of capital is 12% from the 5th year ?

Swathi Krishna

CA Final

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28-Aug-23 23:24

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Answers (2)

Because we are arriving at value at end of high growth yr 4 and the arriving from it value at yr 0 discount rate for yt 0-4 is 13%

Sriram Somayajula

Admin

29-Aug-23 07:05

Sriram Somayajula Admin

Because we are arriving at value at end of high growth yr 4 and the arriving from it value at yr 0 discount rate for yt 0-4 is 13%

Okay sir Thank you

Thread Starter

Swathi Krishna

CA Final

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29-Aug-23 07:53