Equity

Discounted Cash Flow (DCF)

Definition

A valuation method that estimates the value of an investment based on its expected future cash flows discounted to present value using a discount rate such as WACC.

Example
DCF analysis projects free cash flows and discounts them at WACC to arrive at intrinsic value.
Related Terms
Free Cash Flow (FCF) Weighted Average Cost of Capital (WACC)
Frequently Asked Question
What is Discounted Cash Flow (DCF)?
DCF (Discounted Cash Flow) is a valuation method that estimates an investment's value based on expected future cash flows discounted to present value at a rate like WACC.
APA Citation
Clark, R. (2025). Discounted Cash Flow (DCF). VixShield Trading Glossary. Retrieved from https://www.vixshield.com/glossary/dcf
RC
Russell Clark, FNP-C
Author of SPX Mastery series · Founder of VixShield
Last updated:  ·  Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.