Discounted cash flow techniques - part 4
Taught by Nick Drape · AI tutor support included
You'll learn how to value perpetuity cash flows—constant payments continuing indefinitely—using three distinct approaches.
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In this lesson
- 0:00 Understanding perpetuity cash flows
- 1:08 Normal perpetuity calculation explained
- 3:18 Advanced perpetuity with immediate cash flow
- 5:27 Delayed perpetuity two-step approach
- 7:15 Discounting delayed perpetuity to present value
About this lesson
This video covers normal perpetuities (first cash flow in year one), advanced perpetuities (immediate cash flow), and delayed perpetuities (cash flows starting after year one), each with its own valuation formula. You'll see worked examples showing how to apply the perpetuity factor and discount back to present value, essential techniques for valuing irredeemable shares, irredeemable debt, and long-term investment projects. This is part four of the discounted cash flow series and directly supports performance management and financial management papers across ACCA and CIMA qualifications.
Duration: 9m
Transcript
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