Abstract
The discounting cash flow (DCF) technique is the most popular approach for valuing firms' projects. Basically, it consists of discounting the values of the forecasted future cash flows by some interest rate, for example the so-called weighted average cost of capital (WACC), or an Enterprise's rate of return (measured by the annual growth of the firm's total assets), or, eventually, a required (desired) rate of return. In this work, we discuss the effect of the uncertainty of future interest rates on real option valuation
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