Mid-Year Convention
Discounting each year's cash as if it arrived in the middle of the year rather than all on the last day.
Closer to how cash actually turns up, and it raises the valuation slightly compared with year end discounting.
Discounting each year's cash as if it arrived in the middle of the year rather than all on the last day.
Closer to how cash actually turns up, and it raises the valuation slightly compared with year end discounting.