Talos Guides
DCF
Use hold period, growth, discount rate, and exit assumptions to frame time-based value.
Purpose
DCF helps explain whether return depends on operations, timing, exit assumptions, or capital markets.
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When to use it
NOI is modeled.
The hold period matters.
A memo needs Base, Downside, and Upside framing.
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Inputs needed
Hold period
Revenue growth
Expense growth
Vacancy
Discount rate
Terminal cap rate
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How to read the output
Compare DCF output against simple valuation metrics.
Watch terminal cap and discount rate sensitivity.
Use saved scenarios to document the range.
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Common mistakes
Over-precision in long forecasts.
Hiding exit assumptions.
Ignoring downside cases.
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Next steps
Sensitivity
Monte Carlo
Report Center
Professional note
A DCF is an assumption framework. The memo should make those assumptions visible.