Discounted cash flow (DCF) in the context of stock markets is a method of valuing a company based on its expected future cash flows. The idea is that the value of a company today is equal to the sum of…

The creditors provided $7,000 and the stockholders provided $9,300. Viewed another way, the corporation has assets of $16,300 with the creditors having a claim of $7,000 and the stockholders having a residual claim of $9,300. Although stockholders’ equity decreases because…