Three-Stage Free Cash Flow to Equity (FCFE) Discount Model
Three-Stage Free Cash Flow to Equity (FCFE) Discount Model
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Value the equity in a firm with three stages of growth (an initial period of high growth, a transition period of declining growth and a final stable period of growth) on the basis of free cashflows to equity.
User defined inputs
The user has to define the following inputs to the model:
1. Length of each growth phase
2. Growth rate in each growth phase
3. Capital Spending, Depreciation and Working Capital in each growth phase
4. Costs of Equity in each growth phase
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)
User defined inputs
The user has to define the following inputs to the model:
1. Length of each growth phase
2. Growth rate in each growth phase
3. Capital Spending, Depreciation and Working Capital in each growth phase
4. Costs of Equity in each growth phase
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)