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Divide the cash flow in the next year from Step 3 by your Step 4 result to calculate the residual value. Concluding the example, divide $51,000 by 0.08 to get a $637,500 residual value.
How to value a stock? The main financial analysis techniques are discounted cash flow (DCF analysis) and comparable company analysis (comps). These concepts are used in value investing and calculating ...