DCF Myth Posts
Introductory Post: DCF Valuations: Academic Exercise, Sales Pitch or Investor Tool

  1. If you have a D(discount rate) and a CF (cash flow), you have a DCF.
  2. A DCF is an exercise in modeling & number crunching.
  3. You cannot do a DCF when there is too much uncertainty.
  4. It’s all about D in the DCF (Myths 4.14.24.34.4 & 4.5)
  5. If most of your value in a DCF comes from the terminal value, there is something wrong with your DCF.
  6. A DCF requires too many assumptions and can be manipulated to yield any value you want.
  7. A DCF cannot value brand name or other intangibles.
  8. A DCF yields a conservative estimate of value.
  9. If your DCF value changes significantly over time, there is something wrong with your valuation.
  10. A DCF is an academic exercise.

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