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Discounting Free Cash Flow or Discounting Equity Cash Flow

Which of these two ways is better: discounting the Free Cash Flow or discounting the Equity Cash Flow?

E

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The results we find by discounting the Equity Cash Flow and the Free Cash Flow are the same (otherwise, both of the valuations are not correct).  Personally, we prefer discounting Equity Cash Flows where we get the flow and the discount rate more intuitive. We also like to complement such valuation with the APV.

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