Why do we discount the cash flows at the wacc when we


1. What does enterprise value tell you about the firm?

2. Why do we discount the cash flows at the WACC when we calculate the Enterprise Value using the discounted cash flow model of the firm? Explain.

3. What does the FCF versus economic profit tell you about the company?

4. In Facebook’s 10k, they recorded $2 billion in off balance sheet financing. How would this impact your evaluation of the company?  

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Financial Management: Why do we discount the cash flows at the wacc when we
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