DCF & WACC
You are valuing a company on September 30; its fiscal year ends December 31. How do you build and discount the stub period, and where does the stub FCF number come from?
Model answer
The stub is the remaining 0.25 of the current fiscal year (October-December). Its cash flow: take the remaining portion of the full-year forecast - either bottoms-up from the Q4 forecast or, if flows…
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