Canadian National Railway Company (CNR)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $51.80 | $50.67 | $49.57 | |
| Terminal Growth% | 0 | $52.30 | $51.15 | $50.04 |
| +1% | $52.81 | $51.64 | $50.51 |
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 $73.02 (overvalued by 31.1%) - 10 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: | 55,477 |
| Net Debt (Long-term borrowings less cash): | 5,307 |
| Equity Value: | 25,606 |
| Number of Shares Outstanding: | 473,000,000 |
| Calculated value per share: | $51.15 |
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.