easy · Investment Banking
In a DCF analysis, why is the 'mid-year convention' typically used when discounting projected free cash flows?
- To account for the fact that cash flows are received evenly throughout the year.
- To align the DCF output with the higher valuations found in Precedent Transactions.
- To ensure that terminal value accounts for more than 80% of the total enterprise value.
- To simplify the complex exponent math in Excel-based valuation models.
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