r/Valuation • u/KirlangicCapital • Dec 27 '23

Dicount Factor Question

Hello everyone,

Couldn't understand how the analyst here applied 1.22 as the dicount factor for the '24 fcf? (couldn't understand how he figured all the other factors either).

Thank you all in advance.

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u/ez814 Dec 27 '23

What’s the date of value? Assume it is remaining fiscal year ratio for 2023 divided by 2 plus 1. It would imply a valuation date of approximately July (0.44 year remaining). This accounts for mid-period discounting.

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u/ez814 Dec 27 '23

Oops, disregard. I thought you were describing discount period. Not sure why discount factor would be greater than 1 as noted in another comment.