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Faorecasting free cash flows

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It has been argued that forecasting free cash flows explicitly for more than ten years is typically not optimal, since one lacks precise enough information to make good forecasts after ten years. Hence, one obtains a more accurate valuation by applying the continuation value formula at the latest after ten years rather than, for example, after 20 years. Do you agree with this statement and its reasoning? Why or why not? Explain your reasoning carefully. No calculations are needed here.

Reference no: EM132953766

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