A valuation for an investment created by estimating future cash flows using a measure of risk, which can be thought of as the required rate of return, and considering the time of the investment period. To calculate valuations of stocks using discounted cash flows, the value is estimated using some measure of the present value of a cash flow. These cash flows can be either dividends, earnings, or free cash flow.

# discounted cash flow - Investment & Finance Definition

Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.

Used by arrangement with John Wiley & Sons, Inc.

Used by arrangement with John Wiley & Sons, Inc.

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