The discounted free cash flow model ignores interest income and expense but adjusts for cash and debt directly.

Question

Quizplus · Accepted Answer

The discounted free cash flow (DCF) model focuses on the cash flows generated by the operations of a business, ignoring interest income and expense because it adjusts for cash and debt directly in the valuation by considering the net debt position in the enterprise value calculation.

The Discounted Free Cash Flow Model Ignores Interest Income and Expense