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Do stocks really trade based on DCF? That sounds like a fiction taught in schools. I thought in the real world they traded based on whatever the hell criteria t
by nicky0 9y ago
Do stocks really trade based on DCF? That sounds like a fiction taught in schools. I thought in the real world they traded based on whatever the hell criteria the people trading them felt like.
- relix 9y agoThey definitely don't trade based on DCF, and just one look at the stock market confirms this. DCF is just one method to put a valuation on a company. There are plenty other ways. The parameters chosen allow enough freedom to basically come up with any valuation you want anyway, so there's definitely no one "correct valuation" even if restricted to DCF.