Canadian National Railway Company (CNR)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $73.13 | $72.05 | $71.00 | |
| Terminal Growth% | 0 | $73.36 | $72.27 | $71.21 |
| +1% | $73.59 | $72.50 | $71.43 |
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 $73.01 (overvalued by 30.91%) - 11 hours ago
- dweis created a new valuation of $43.44 (overvalued by 4.44%) - over 4 years ago
- GordonGekko created a new valuation of $51.15 (overvalued by 5.44%) - over 4 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 52,836 |
| Net Debt (Long-term borrowings less cash): | 6,475 |
| Equity Value: | 37,208 |
| Number of Shares Outstanding: | 438,000,000 |
| Calculated value per share: | $72.27 |
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.