Finance / July 13, 2018 / Andi Barnett
In a company, debt finance can take a number of forms. For example, money can be borrowed from a bank as a term loan, or money can be borrowed from investors, in the form of debentures.
The calculation of EV is affected by the assumptions regarding timing of the cash flows within a projection interval. The mid-period convention assumes that the UFCFs occur at the middle of each projection interval, while the end-period convention assumes all UFCFs occur at the end of each interval. In practice, the end-period convention is often used because it is more conservative (the UFCFs are discounted at a time more distant from the present).
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