DISCOUNTED CASH FLOW IN COMPANY EVALUATION

Abstract

This article aims to carry out a study on the method of evaluating companies – best known as Valuation – based on discounted cash flow, highlighting the main aspects related to the theme, pointing out its advantages and limitations. Through a expository approach, we try to discuss not only the contributions of the authors who dedicated themselves to the subject, but also their influence on the defense or not of the methodology in decision-making. Thus, this article brings the work of Damodaran and Copeland on the characteristics of approaches to valuation models, in addition to other concepts related to this topic. Finally, the advantages and limitations of the studied model are addressed, in which it is concluded that when carried out with technical rigor from the survey and data analysis to the financial projections of wealth generation, the method is safe and reliable.