If you want to value a firm but do not want to explicitly forecast its dividends, what is the simplest model for you to use?

Question

Quizplus · Accepted Answer

The discounted free cash flow model calculates the present value of future cash flows that are available to equity and debt holders after operating expenses, capital expenditures, and changes in working capital have been accounted for. It does not require explicit forecasting of dividends and is therefore a simpler model to use than the dividend-discount model. The enterprise value model is also an option but may require additional adjustments for debt and other liabilities.

If You Want to Value a Firm but Do Not