The second step in a DCF model is calculating the Weighted Average Cost of Capital (WACC), which serves as the discount rate to bring future cash flows back to the present.

The Weighted Average Cost of Capital (WACC) measures a company's cost of financing, which can come from either debt or equity.

A Discounted Cash Flow (DCF) model is a valuation method used to estimate the current value of an asset today based on its future cash flows.

The final step in a DCF model is to calculate the enterprise value, equity value, and implied share price to arrive at a valuation.

The first key step in creating a DCF model is forecasting free cash flows, typically for a five to ten year period.