Altera Corporation (ALTR)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $40.07 | $39.62 | $39.19 | |
| Terminal Growth% | 0 | $40.24 | $39.78 | $39.34 |
| +1% | $40.41 | $39.95 | $39.50 |
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
- Valuecruncher created a new valuation of $24.06 (overvalued by 55.41%) - over 4 years ago
- Valuecruncher created a new valuation of $39.79 (overvalued by 26.26%) - over 4 years ago
- Valuecruncher created a new valuation of $39.78 (overvalued by 26.28%) - over 4 years ago
- SethWellbourne created a new valuation of $11.29 (overvalued by 35.04%) - almost 13 years ago
- GordonGekko created a new valuation of $12.22 (overvalued by 19.55%) - 12 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 15,187 |
| Net Debt (Long-term borrowings less cash): | -1,154 |
| Equity Value: | 16,342 |
| Number of Shares Outstanding: | 302,000,000 |
| Calculated value per share: | $39.78 |
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.