Question: Please assist: Discounted Cash Flow (DCF) is calculated by using: A. Cash flows before financing effects discounted by WACC. B. Free cash flow assuming 100%
Please assist:
Discounted Cash Flow (DCF) is calculated by using:
A. Cash flows before financing effects discounted by WACC.
B. Free cash flow assuming 100% equity financing, adjusted for the value of debt tax shields discounted by the unlevered cost of equity for free cash flows and the cost of debt for debt tax shields
C. Cash flows to debt discounted by the cost of debt.
D. Cash flows to equity discounted by the cost of equity.
E. Free cash flow assuming financing, adjusted for the value of debt tax shields discounted by the WACC and the cost of debt for debt tax shields.
F. Cash flows after financing effects discounted by debt rate.
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