Time Warner Inc. (TWX)
Discount cash flow analysis
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $29.48 | $29.03 | $28.58 | |
| Terminal Growth% | 0 | $29.57 | $29.12 | $28.67 |
| +1% | $29.67 | $29.21 | $28.76 |
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 $88.00 (undervalued by 14.79%) - over 4 years ago
- GordonGekko created a new valuation of $29.12 (undervalued by 7.06%) - 11 years ago
- dianekim227 created a new valuation of $15.07 (overvalued by 40.83%) - over 11 years ago
- dianekim227 created a new valuation of $15.07 (overvalued by 40.83%) - over 11 years ago
- dianekim227 created a new valuation of $15.07 (overvalued by 40.83%) - over 11 years ago
- dianekim227 created a new valuation of $15.07 (overvalued by 40.83%) - over 11 years ago
- dianekim227 created a new valuation of $15.07 (overvalued by 40.83%) - over 11 years ago
- GordonGekko created a new valuation of $17.25 (overvalued by 24.47%) - almost 12 years ago
- SethWellbourne created a new valuation of $5.10 (overvalued by 72.02%) - almost 12 years ago
- GordonGekko created a new valuation of $8.15 (undervalued by 9.1%) - almost 12 years ago
- KiwiEMH created a new valuation of $14.57 (overvalued by 1.55%) - almost 13 years ago
- contrarian created a new valuation of $18.93 (undervalued by 24.62%) - almost 13 years ago
- TheCrunchBlog created a new valuation of $15.08 (overvalued by 0.72%) - almost 13 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 122,807 |
| Net Debt (Long-term borrowings less cash): | 33,301 |
| Equity Value: | 31,758 |
| Number of Shares Outstanding: | 1,167,000,000 |
| Calculated value per share: | $29.12 |
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.