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Part 2

Why Is DCF and Net Present Value So Important?

The reason why understanding net present value and DCF models is so important is because it can give you A LOT of insights about the markets. The way the DCF model works also has a direct bearing on how stocks will be valued at any given time. For example, in the era of ultra-loose monetary policy when the Fed is accommodative and interest rates are low, the Discount Rate that is used to discount potential future earnings (usually the risk-free interest rate) is correspondingly low and thus hig...

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Understanding Net Present Value and The Basics of Discounted Cash Flow Models (DCF)
3 Lessons
~11 mins in total
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