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Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $0.81 | $0.75 | $0.70 | |
| Terminal Growth% | 0 | $0.87 | $0.81 | $0.75 |
| +1% | $0.87 | $0.81 | $0.75 |
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 $0.81 (overvalued by 46.0%) - 1 day ago
- kuangxiaohui created a new valuation of $2.95 (undervalued by 132.28%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 196.06%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 196.06%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 196.06%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 129.92%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 129.92%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 129.92%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 131.75%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 131.75%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.95 (undervalued by 134.13%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.95 (undervalued by 134.13%) - over 3 years ago
- GordonGekko created a new valuation of $0.83 (overvalued by 7.78%) - over 3 years ago
- GordonGekko created a new valuation of $1.15 (undervalued by 10.58%) - over 4 years ago
- jmsnz created a new valuation of $1.10 (undervalued by 6.8%) - over 4 years ago
- mattellingsen created a new valuation of $13.75 (undervalued by 1248.04%) - over 4 years ago
- jetjungle created a new valuation of $2.82 (undervalued by 213.33%) - over 4 years ago
- GordonGekko created a new valuation of $1.11 (undervalued by 38.75%) - over 4 years ago
- nzvikram created a new valuation of $2.12 (undervalued by 146.51%) - over 4 years ago
- stevesnz created a new valuation of $0.87 (overvalued by 2.25%) - over 4 years ago
- Warlock created a new valuation of $1.26 (overvalued by 0.79%) - over 4 years ago
- Sam created a new valuation of $1.86 (undervalued by 44.19%) - over 5 years ago
- GordonGekko created a new valuation of $1.24 (overvalued by 3.88%) - over 5 years ago
- KiwiEMH created a new valuation of $1.18 (undervalued by 3.51%) - over 5 years ago
- Julian created a new valuation of $0.46 (overvalued by 58.93%) - over 5 years ago
- GordonGekko created a new valuation of $1.12 (undervalued by 0.0%) - over 5 years ago
- Abo created a new valuation of $0.23 (overvalued by 81.45%) - over 5 years ago
- gmw created a new valuation of $0.17 (overvalued by 80.0%) - over 5 years ago
- jeremy created a new valuation of $2.55 (undervalued by 97.67%) - over 5 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 2,314 |
| Net Debt (Long-term borrowings less cash): | 665 |
| Equity Value: | 1,642 |
| Number of Shares Outstanding: | 1,099,000,000 |
| Calculated value per share: | $0.81 |
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.