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Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $1.14 | $1.12 | $1.11 | |
| Terminal Growth% | 0 | $1.14 | $1.12 | $1.11 |
| +1% | $1.14 | $1.12 | $1.11 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- GordonGekko created a new valuation of $2.19 (undervalued by 14.66%) - over 10 years ago
- GordonGekko created a new valuation of $2.34 (undervalued by 4.46%) - almost 11 years ago
- GordonGekko created a new valuation of $2.70 (undervalued by 20.54%) - almost 11 years ago
- GordonGekko created a new valuation of $2.78 (undervalued by 20.87%) - almost 11 years ago
- BrendonDCFV created a new valuation of $1.45 (overvalued by 36.96%) - almost 11 years ago
- BrendonDCFV created a new valuation of $1.12 (overvalued by 51.3%) - almost 11 years ago
- BrendonDCFV created a new valuation of $2.51 (undervalued by 9.13%) - almost 11 years ago
- sambling created a new valuation of $2.93 (undervalued by 24.68%) - 11 years ago
- DarrylLundy created a new valuation of $2.54 (overvalued by 8.3%) - over 11 years ago
- GordonGekko created a new valuation of $2.96 (undervalued by 13.41%) - over 11 years ago
- GordonGekko created a new valuation of $2.69 (undervalued by 3.86%) - over 11 years ago
- SethWellbourne created a new valuation of $2.54 (undervalued by 9.48%) - almost 12 years ago
- GordonGekko created a new valuation of $2.63 (undervalued by 11.91%) - almost 12 years ago
- nzvikram created a new valuation of $3.12 (undervalued by 24.8%) - almost 12 years ago
- nzvikram created a new valuation of $3.33 (undervalued by 33.2%) - almost 12 years ago
- KWH created a new valuation of $1.53 (overvalued by 32.6%) - 12 years ago
- botis created a new valuation of $1.45 (overvalued by 34.39%) - 12 years ago
- KiwiEMH created a new valuation of $2.52 (undervalued by 1.61%) - over 12 years ago
- KiwiEMH created a new valuation of $2.58 (overvalued by 5.49%) - over 12 years ago
- KiwiEMH created a new valuation of $2.82 (undervalued by 0.0%) - over 12 years ago
- Patricko created a new valuation of $1.37 (overvalued by 51.25%) - over 12 years ago
- KiwiEMH created a new valuation of $3.16 (overvalued by 0.94%) - over 12 years ago
- KiwiEMH created a new valuation of $3.12 (overvalued by 4.88%) - over 12 years ago
- GordonGekko created a new valuation of $2.98 (overvalued by 12.35%) - over 12 years ago
- KiwiEMH created a new valuation of $3.24 (overvalued by 11.96%) - over 12 years ago
- KiwiEMH created a new valuation of $3.43 (overvalued by 0.58%) - over 12 years ago
- TheCrunchBlog created a new valuation of $3.40 (overvalued by 8.85%) - over 12 years ago
- tiger created a new valuation of $3.25 (overvalued by 14.25%) - over 12 years ago
- GordonGekko created a new valuation of $4.00 (undervalued by 5.54%) - over 12 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 6,016 |
| Net Debt (Long-term borrowings less cash): | 858 |
| Equity Value: | 5,119 |
| Number of Shares Outstanding: | 1,842,000,000 |
| Calculated value per share: | $1.12 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.