Still Many Ways to Skin a Capital Cost

Harvard Business Review

For instance, if you had recently run a discounted cash flow, or DCF, valuation on the UK-based mobile phone giant Vodafone, you would have found that changing the discount rate from 12% to 11.6% — hardly a major change — would have increased the company's estimated value by 15%, or £13.4 knew that firms were making heavy use of the capital asset pricing model (CAPM) to size up growth opportunities, but that the model was only as good as its inputs.

DCF 14