Calculating Your Portfolio's Beta Canceling an Order

Can Your Investment Stomach an Entire Economy?

When assessing a discounted cash flow calculation, examine the weighted average cost of capital (a higher rate produces a lower valuation) and the projected terminal (final) profit-growth rate (a higher rate produces a higher valuation). Be careful when the terminal rate is higher than the GDP growth rate. A higher rate implies that the company will eventually swallow the entire economy, which is an impossibility.