discounted cash flow (dcf) model

What are the Key Assumptions in the DCF Model?

The accuracy of the DCF model depends on several critical assumptions:
- Revenue Growth: Assumptions about how quickly the business will grow its revenues over time.
- Expense Projections: Estimates of operating expenses, cost of goods sold, and other costs.
- Capital Expenditures: Projections of the investments needed in fixed assets and infrastructure.
- Discount Rate: The choice of an appropriate discount rate that reflects the risk profile of the business.

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