Colgate-Palmolive Company (CL)
Discount cash flow analysis
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $82.77 | $81.25 | $79.79 | |
| Terminal Growth% | 0 | $83.41 | $81.87 | $80.39 |
| +1% | $84.06 | $82.50 | $81.00 |
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 $70.99 (overvalued by 3.45%) - over 4 years ago
- swampler created a new valuation of $74.22 (undervalued by 26.22%) - almost 12 years ago
- swampler created a new valuation of $57.62 (overvalued by 2.01%) - almost 12 years ago
- SethWellbourne created a new valuation of $46.61 (overvalued by 20.72%) - almost 12 years ago
- nzvikram created a new valuation of $73.00 (undervalued by 19.89%) - almost 12 years ago
- dweis created a new valuation of $69.83 (undervalued by 9.02%) - 12 years ago
- TheCrunchBlog created a new valuation of $75.96 (undervalued by 20.53%) - 12 years ago
- KiwiEMH created a new valuation of $74.65 (undervalued by 0.39%) - almost 13 years ago
- Diegoengel created a new valuation of $81.87 (undervalued by 19.36%) - almost 13 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 40,426 |
| Net Debt (Long-term borrowings less cash): | 3,087 |
| Equity Value: | 35,089 |
| Number of Shares Outstanding: | 507,000,000 |
| Calculated value per share: | $81.87 |
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.