Originally Posted by
winner69
They are the same of course
But in this discussion the $1m cash flow is a forecast / projection / calculation ... and the problem / question is what would pay to get a forecasted $1m from Grandma's Trotters and how much for the Coke $1m
Some analysts don't use WACC at all ...... they do cashflows under many scenarios and by applying probabilities against each come up with an expected value of the cash flows and use those as the basis of their valuations
Note the words applying probabilities and expected ... see it all really is a big guess (OK best guess / judgement) ... just like the equity premium used in WACC calculations is and just like what Warren might use
So back to Grandma and Coke ... what is the likliehood of those $1m cash flows actually be achieved
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