Jones Apparel Group, Inc. (JNY)
Discount cash flow analysis
Price history
Sensitivity matrix
-1% |
Discount Rate % 0% |
1% |
||
---|---|---|---|---|
-1% | $6.98 | $6.77 | $6.56 | |
Terminal Growth% | 0 | $7.05 | $6.84 | $6.63 |
+1% | $7.13 | $6.91 | $6.69 |
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 $19.38 (undervalued by 29.29%) - 1 year ago
- GordonGekko created a new valuation of $6.84 (overvalued by 23.06%) - over 8 years ago
- GordonGekko created a new valuation of $3.64 (undervalued by 21.33%) - over 8 years ago
Comments
The boring details
All amounts in millions | Figures |
Enterprise Value: | 1,723 |
Net Debt (Long-term borrowings less cash): | 443 |
Equity Value: | 759 |
Number of Shares Outstanding: | 85,000,000 |
Calculated value per share: | $6.84 |
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.