New Zealand Exchange Limited (NZX)
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $3.15 | $3.12 | $3.08 | |
| Terminal Growth% | 0 | $3.16 | $3.13 | $3.09 |
| +1% | $3.17 | $3.14 | $3.10 |
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
- cdaynes created a new valuation of $3.13 (undervalued by 43.58%) - 1 month ago
- GordonGekko created a new valuation of $9.33 (undervalued by 13.09%) - 9 months ago
- GordonGekko created a new valuation of $6.40 (undervalued by 13.88%) - 1 year ago
- Julian created a new valuation of $4.14 (overvalued by 21.14%) - 1 year ago
- Julian created a new valuation of $4.01 (overvalued by 23.62%) - 1 year ago
- Julian created a new valuation of $4.97 (overvalued by 5.33%) - 1 year ago
- Julian created a new valuation of $6.87 (undervalued by 30.86%) - 1 year ago
- NZXCrunchBlog created a new valuation of $6.77 (undervalued by 14.75%) - 1 year ago
- KiwiEMH created a new valuation of $6.41 (overvalued by 0.47%) - 1 year ago
- KiwiEMH created a new valuation of $6.41 (overvalued by 0.62%) - 1 year ago
- KiwiEMH created a new valuation of $7.58 (overvalued by 1.81%) - 1 year ago
- andrew created a new valuation of $6.40 (overvalued by 23.35%) - 1 year ago
- KiwiEMH created a new valuation of $7.86 (overvalued by 0.51%) - 1 year ago
- tiger created a new valuation of $6.99 (overvalued by 14.96%) - 1 year ago
- Sam created a new valuation of $7.37 (overvalued by 10.34%) - 1 year ago
- Sam created a new valuation of $6.83 (overvalued by 15.26%) - 1 year ago
- GordonGekko created a new valuation of $8.36 (undervalued by 3.72%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 190 |
| Net Debt (Long-term borrowings less cash): | -8 |
| Equity Value: | 198 |
| Number of Shares Outstanding: | 90,000,000 |
| Calculated value per share: | $3.13 |
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.