VueSLUI When would it be most appropriate to perform a discounted cash flow (DCF) valuation by discounting the Free Cash Flows to the Firm (FCFF) instead of the Free Cash Flow to Equity holders (FCFE) or Dividends? When the economy is growing Firms that only have a cost of equity and no WACC When the economy is in a recession Firms that generate lots of cash flows with stable leverage Firms that have leverage that is too high or too low and expect to change the leverage over time