Which variable generally represents the majority of a DCF valuation?

Question

Quizplus · Accepted Answer

The terminal value generally represents the majority of a DCF valuation, as it reflects the cash flows expected beyond the explicit forecast period. The terminal value is calculated by either using a perpetuity growth rate or a multiple of the final year's EBITDA or free cash flow. The other options, CAPM, Beta, and WAAC, are important inputs in the DCF valuation process but generally do not represent the majority of the valuation.

Which Variable Generally Represents the Majority of a DCF Valuation