Discounted Cash Flow Illustration (Equity)

Discounted Cash Flow Illustration (Equity)

Abdulla Javeri

30 years: Financial markets trader

After covering compounding and discounting, Abdulla explains how the discounted cash flow can be used to make a rational investment decision. 

After covering compounding and discounting, Abdulla explains how the discounted cash flow can be used to make a rational investment decision. 

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Discounted Cash Flow Illustration (Equity)

5 mins 23 secs

Overview

We value an equity stake of a company below by finding the present value of its future cash flows and calculating the net present value based on our initial investment.

Key learning objectives:

  • How can DCF be used to make an investment decision?

  • How can investors renegotiate an investment opportunity?

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Summary
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Expert
Abdulla Javeri

Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.