Cost of capital takes into account the ability of the firm to return free cash flows, although it is targeted at its stability and predictability.

资本成本将企业赚回自由现金流的能力考虑在内，虽然其瞄准的目标是该企业获得的自由现金流的稳定性和可预测性。

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Here is a better way to value stocks: First, the investor should weigh the cost of capital against the firm's stream of current and future free cash flows to determine the asset's value.

FORBES: The P/E Problem