3.4 - Operationally Intensive Real Assets Flashcards
1
Q
DCF (IP Valuation)
A
P0 = D1 / (r-g)
Where r is the req. rate of return, g is the growth rate in dividends and earnings
2
Q
Value of IP Investment @ time 0
A
Vip,0 = (p * CF1) / (r-g)
P is probability of generating cash flow
*growth rate is likely negative
