Yahoo! Inc. (YHOO)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $20.25 | $19.93 | $19.63 | |
| Terminal Growth% | 0 | $20.39 | $20.07 | $19.77 |
| +1% | $20.54 | $20.22 | $19.91 |
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 $53.08 (undervalued by 20.25%) - over 4 years ago
- SethWellbourne created a new valuation of $8.91 (overvalued by 49.14%) - almost 11 years ago
- Diegoengel created a new valuation of $8.86 (overvalued by 41.63%) - 11 years ago
- GordonGekko created a new valuation of $14.49 (overvalued by 14.21%) - over 11 years ago
- jbryanscott created a new valuation of $11.78 (overvalued by 18.76%) - over 11 years ago
- jbryanscott created a new valuation of $11.78 (overvalued by 18.76%) - over 11 years ago
- GordonGekko created a new valuation of $14.92 (undervalued by 5.52%) - almost 12 years ago
- SethWellbourne created a new valuation of $7.21 (overvalued by 47.22%) - almost 12 years ago
- SethWellbourne created a new valuation of $10.46 (overvalued by 17.64%) - almost 12 years ago
- turbocarlos created a new valuation of $15.37 (undervalued by 28.4%) - 12 years ago
- GordonGekko created a new valuation of $11.35 (undervalued by 7.28%) - over 12 years ago
- TheCrunchBlog created a new valuation of $17.62 (undervalued by 36.59%) - over 12 years ago
- GordonGekko created a new valuation of $15.43 (undervalued by 21.98%) - over 12 years ago
- GordonGekko created a new valuation of $14.80 (overvalued by 3.33%) - over 12 years ago
- TheCrunchBlog created a new valuation of $20.07 (overvalued by 27.6%) - almost 13 years ago
- TheCrunchBlog created a new valuation of $23.44 (overvalued by 13.19%) - almost 13 years ago
- TheCrunchBlog created a new valuation of $17.91 (overvalued by 33.67%) - almost 13 years ago
- GordonGekko created a new valuation of $20.07 (overvalued by 25.67%) - almost 13 years ago
- GordonGekko created a new valuation of $22.19 (undervalued by 2.4%) - almost 13 years ago
- KiwiEMH created a new valuation of $19.84 (overvalued by 7.29%) - almost 13 years ago
- GordonGekko created a new valuation of $21.80 (overvalued by 18.66%) - almost 13 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 59,477 |
| Net Debt (Long-term borrowings less cash): | -1,251 |
| Equity Value: | 37,147 |
| Number of Shares Outstanding: | 1,375,000,000 |
| Calculated value per share: | $20.07 |
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.