Freightways Ltd (FRE)
Discount cash flow analysis
Sensitivity matrix
-1% |
Discount Rate % 0% |
1% |
||
---|---|---|---|---|
-1% | $3.12 | $3.05 | $2.99 | |
Terminal Growth% | 0 | $3.13 | $3.07 | $3.01 |
+1% | $3.15 | $3.09 | $3.03 |
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 $5.11 (overvalued by 22.58%) - over 1 year ago
- GordonGekko created a new valuation of $2.56 (overvalued by 10.49%) - almost 9 years ago
- gordonsk created a new valuation of $2.79 (undervalued by 0.36%) - 9 years ago
- GordonGekko created a new valuation of $3.07 (undervalued by 10.43%) - 9 years ago
- GordonGekko created a new valuation of $3.07 (undervalued by 10.43%) - 9 years ago
- KiwiEMH created a new valuation of $3.08 (undervalued by 0.0%) - over 9 years ago
- KiwiEMH created a new valuation of $3.27 (overvalued by 0.3%) - over 9 years ago
- GordonGekko created a new valuation of $3.10 (overvalued by 7.74%) - 10 years ago
Comments
The boring details
All amounts in millions | Figures |
Enterprise Value: | 1,048 |
Net Debt (Long-term borrowings less cash): | 199 |
Equity Value: | 357 |
Number of Shares Outstanding: | 128,000,000 |
Calculated value per share: | $3.07 |
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.