What do you use to discount a DCF?

As it is interview season we are continuing with how to answer main investment banking interview questions. This is really common question you will come across when interviewing for investment banking positions. To answer it, take a look at the content below, a sample for our IncuBanker online course…

What would you use to discount the DCF to its present value?

There are 2 answers depending on which type of DCF you are working with:

  • For unlevered DCFs use WACC (gives you enterprise value)
  • For levered DCFs use the cost of equity (gives you equity value)

Strategy Video

Sample Answer

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