3M Company (MMM)
Discount cash flow analysis
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $86.50 | $85.28 | $84.09 | |
| Terminal Growth% | 0 | $86.84 | $85.61 | $84.41 |
| +1% | $87.18 | $85.94 | $84.73 |
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 $98.00 (overvalued by 45.43%) - over 4 years ago
- sloanwalker created a new valuation of $92.46 (undervalued by 14.63%) - over 10 years ago
- sloanwalker created a new valuation of $88.12 (undervalued by 9.25%) - over 10 years ago
- sloanwalker created a new valuation of $88.32 (undervalued by 9.5%) - over 10 years ago
- sloanwalker created a new valuation of $89.13 (undervalued by 10.5%) - over 10 years ago
- sloanwalker created a new valuation of $97.29 (undervalued by 20.62%) - over 10 years ago
- sloanwalker created a new valuation of $107.06 (undervalued by 32.73%) - over 10 years ago
- jman created a new valuation of $81.91 (overvalued by 2.5%) - over 10 years ago
- SethWellbourne created a new valuation of $99.22 (undervalued by 18.84%) - 11 years ago
- GordonGekko created a new valuation of $85.61 (undervalued by 8.12%) - 11 years ago
- jim1023 created a new valuation of $76.95 (overvalued by 2.82%) - 11 years ago
- tinmanvc created a new valuation of $78.55 (overvalued by 4.56%) - 11 years ago
- tinmanvc created a new valuation of $78.55 (overvalued by 4.56%) - 11 years ago
- GordonGekko created a new valuation of $72.60 (overvalued by 10.34%) - over 11 years ago
- GordonGekko created a new valuation of $53.45 (undervalued by 0.6%) - 12 years ago
- SethWellbourne created a new valuation of $38.77 (overvalued by 20.31%) - 12 years ago
- afi created a new valuation of $46.23 (overvalued by 3.69%) - 12 years ago
- dlk61494 created a new valuation of $77.47 (undervalued by 39.91%) - over 12 years ago
- rrfield created a new valuation of $43.04 (overvalued by 26.77%) - over 12 years ago
- dweis created a new valuation of $60.90 (overvalued by 3.43%) - over 12 years ago
- TheCrunchBlog created a new valuation of $85.16 (undervalued by 16.72%) - almost 14 years ago
- GordonGekko created a new valuation of $89.74 (undervalued by 22.9%) - almost 14 years ago
- acoy created a new valuation of $70.37 (overvalued by 7.19%) - almost 14 years ago
- GordonGekko created a new valuation of $79.32 (undervalued by 2.12%) - almost 14 years ago
- tiger created a new valuation of $85.84 (undervalued by 12.47%) - almost 14 years ago
- Sam created a new valuation of $0.00 (overvalued by 100.0%) - almost 14 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 129,542 |
| Net Debt (Long-term borrowings less cash): | 1,926 |
| Equity Value: | 56,265 |
| Number of Shares Outstanding: | 710,000,000 |
| Calculated value per share: | $85.61 |
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.