What is DCF ? How it compares to LBO?

Answer

DCF=Discount Cash Flow valuation Model.

Discount = Z(0,T) zero coupon bond pricing= (1+i)^(-T) so it discounted from future back to today.

Cash Flow = either dividend on a stock or Future Cash flow projection on Cash Flow Statement.

So we can value both Market Instrument and A business, which have different i= r (exp return) or =WACC

LBO is financier model, buy and sell not running buz, so use Multiples