Business, 19.04.2021 16:00 tinytoonjr9510

Discounting Cash Flows and Earnings. Under the residual income approach and the discounted cash flow approach to firm valuation, carnings and cash flows, respectively, are discounted using a firm's cost of equity. Discuss why the cost of equity is the appropriate discount rate to use to discount a firm's camings and cash flows. Why is the cost of debt inappropriate to use to discount a firm's earnings or cash flows

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Discounting Cash Flows and Earnings. Under the residual income approach and the discounted cash flow...