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Strategies & Market Trends : Free Cash Flow as Value Criterion -- Ignore unavailable to you. Want to Upgrade?

To: Reginald Middleton who wrote (132)	11/4/1997 11:42:00 AM
From: Pirah Naman	Read Replies (1) \| Respond to of 253

> These mean the same thing. All right, I will except for now that we are saying the same thing in different ways. > If math leads to a false preceision, why do you rely on numbers? Sorry was not clear. Am not suggesting that math leads to a false precision. Am suggesting that adding additional parameters is superfluous given what you have agreed is the real opportunity cost. > To my knowledge, there is only one accepted definition of discount rate Sorry was again not clear - too late at night. What I am objecting to is your application of discount rate to a company's return on capital. The opportunity cost for the company certainly affects how they decide to employ capital, and from the perspective of a potential owner of the company, certainly affects what cash flows might be realistically anticipated. It does not affect the value of the actual cash flows. Those should be discounted against the opportunity cost of the individual.