easy · Investment Banking valuation-core
In a DCF analysis, why is the 'Mid-Year Convention' used when discounting cash flows?
- To reduce the impact of the terminal value on the total enterprise value.
- To account for cash flows arriving evenly throughout the year.
- It is required under GAAP for all intrinsic valuation models.
- To align the DCF with the company's mid-year fiscal reporting.
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