General Electric Company (GE)
Discount cash flow analysis
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $27.78 | $26.70 | $25.65 | |
| Terminal Growth% | 0 | $28.10 | $27.01 | $25.95 |
| +1% | $28.42 | $27.32 | $26.25 |
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 $24.70 (overvalued by 16.75%) - over 4 years ago
- mvacca created a new valuation of $16.13 (undervalued by 4.88%) - over 10 years ago
- pbemech created a new valuation of $14.90 (overvalued by 6.29%) - almost 12 years ago
- GordonGekko created a new valuation of $14.68 (overvalued by 8.88%) - 11 years ago
- baselsina created a new valuation of $18.75 (undervalued by 16.39%) - 11 years ago
- jtwdc1 created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- GordonGekko created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- Yuvraj created a new valuation of $63.82 (undervalued by 376.27%) - over 11 years ago
- Yuvraj created a new valuation of $12.76 (overvalued by 4.78%) - over 11 years ago
- Yuvraj created a new valuation of $7.15 (overvalued by 46.64%) - over 11 years ago
- natet1 created a new valuation of $12.82 (undervalued by 18.05%) - over 11 years ago
- SethWellbourne created a new valuation of $0.00 (overvalued by 100.0%) - almost 12 years ago
- jtmoney15 created a new valuation of $10.76 (undervalued by 11.39%) - almost 12 years ago
- GordonGekko created a new valuation of $10.76 (undervalued by 11.85%) - almost 12 years ago
- dweis created a new valuation of $37.74 (undervalued by 135.58%) - over 12 years ago
- wyomingkid created a new valuation of $63.76 (undervalued by 226.81%) - over 12 years ago
- Derek created a new valuation of $21.62 (undervalued by 14.03%) - over 12 years ago
- GordonGekko created a new valuation of $20.88 (overvalued by 18.12%) - over 12 years ago
- peypar created a new valuation of $11.23 (overvalued by 55.52%) - over 12 years ago
- GordonGekko created a new valuation of $24.95 (overvalued by 6.27%) - over 12 years ago
- Ashkat created a new valuation of $46.68 (undervalued by 66.12%) - over 12 years ago
- KiwiEMH created a new valuation of $26.49 (overvalued by 7.73%) - almost 13 years ago
- GordonGekko created a new valuation of $27.01 (overvalued by 1.35%) - almost 13 years ago
- TheCrunchBlog created a new valuation of $36.16 (undervalued by 32.07%) - almost 13 years ago
- GordonGekko created a new valuation of $29.39 (undervalued by 7.34%) - almost 13 years ago
- GordonGekko created a new valuation of $31.30 (undervalued by 0.94%) - almost 13 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 794,101 |
| Net Debt (Long-term borrowings less cash): | 498,369 |
| Equity Value: | 272,907 |
| Number of Shares Outstanding: | 9,967,000,000 |
| Calculated value per share: | $27.01 |
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.