T11 WACCt where

CF to Firmt = Expected Cash flow to Firm in period t WACC = Weighted Average Cost of Capital While the two approaches use different definitions of cash flow and discount rates, they will yield consistent estimates of value as long as the same set of assumptions is applied for both. It is important to avoid mismatching cash flows and discount rates, since discounting cash flows to equity at the weighted average cost of capital will lead to an upwardly biased estimate of the value of equity, while discounting cash flows to the firm at the cost of equity will yield a downward biased estimate of the value of the firm.

Retirement Planning For The Golden Years

Retirement Planning For The Golden Years

If mutual funds seem boring to you, there are other higher risk investment opportunities in the form of stocks. I seriously recommend studying the market carefully and completely before making the leap into stock trading but this can be quite the short-term quick profit rush that you are looking for if you am willing to risk your retirement investment for the sake of increasing your net worth. If you do choose to invest in the stock market please take the time to learn the proper procedures, the risks, and the process before diving in. If you have a financial planner and you definitely should then he or she may prove to be an exceptional resource when it comes to the practice of 'playing' the stock market.

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