Explain how time value of money fundamentals are used in stock valuation models. I.e., how is stock valuation based on the TVM principles (DCF valuation)? What are the weakest parts of the DCF methods (why some DCF-based valuations come extremely inaccurate)? Support your answer with two real-life examples of companies' valuation: one firm where DCF-based method will likely fail and one firm where same valuation tools should give fairly accurate results. 

Briefly explain your examples?

Answer rating: 100% (QA)

Time value of money TVM is a fundamental principle in finance that recognizes the fact that a dollar today is worth more than a dollar in the future d... View the full answer