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Authors: Lisa P Meulbroek
Published by: Harvard Business Publishing
Originally published in: 2001
Version: 29 March 2001
Revision date: 21-Mar-2019
Length: 4 pages
Data source: Published sources

Abstract

Discounted cash flow valuation calls for using expected future prices of inputs or outputs. This case describes the relationship between spot prices, forward/future prices, and expected future prices. Knowing current forward and future prices alone is not enough to estimate expected future prices, so the forward or future prices are not in general a good estimate of the expected future price.

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Abstract

Discounted cash flow valuation calls for using expected future prices of inputs or outputs. This case describes the relationship between spot prices, forward/future prices, and expected future prices. Knowing current forward and future prices alone is not enough to estimate expected future prices, so the forward or future prices are not in general a good estimate of the expected future price.

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