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By the person doing the valuation. There's no certainty, it's an expected value of the assumed probability distribution, which is why each cash flow is discount
by RivieraKid 5y ago
By the person doing the valuation. There's no certainty, it's an expected value of the assumed probability distribution, which is why each cash flow is discounted - because it's not certain.
Yes, valuation is about predicting future profits which depends on what people will buy etc. For example, I predict that people will continue to buy Coca-Cola in roughly the same volumes as they do today.
- GDC7 5y ago> For example, I predict that people will continue to buy Coca-Cola in roughly the same volumes as they do today. And people before us swore by the fact that people would keep buying cigarettes in the same quantities.
- RivieraKid 5y agoI know nothing about that but in general, prediction and therefore valuation is not easy.