You would model the cashflows the same as a dcf ( same numbers ) . I'm just expressing it as an IRR.
the IRR method introduces Certainty in near term events where Certainty can be established or approximated. I Know what the market cap is and how much the business would cost me to buy.
I also have, say, 10 years of historical financial performance data to guide me through the early future years of my model. This is where the model needs to be at its most accurate.
The theory is the same as the npv method, but I don't care for npv's. all I want to know is if the current share price gives me a high enough return for my next investment dollar .
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You would model the cashflows the same as a dcf ( same numbers )...
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