Sun Microsystems, Inc. (JAVA)
Discount cash flow analysis
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $4.18 | $4.16 | $4.14 | |
| Terminal Growth% | 0 | $4.19 | $4.16 | $4.14 |
| +1% | $4.19 | $4.17 | $4.15 |
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 $6.71 (overvalued by 29.29%) - 6 hours ago
- eriktiden created a new valuation of $6.14 (overvalued by 32.9%) - 6 months ago
- eriktiden created a new valuation of $4.16 (overvalued by 54.54%) - 6 months ago
- laguerriere created a new valuation of $9.52 (undervalued by 2.15%) - 6 months ago
- laguerriere created a new valuation of $11.22 (undervalued by 20.39%) - 6 months ago
- laguerriere created a new valuation of $0.00 (overvalued by 100.0%) - 6 months ago
- laguerriere created a new valuation of $6.43 (overvalued by 30.11%) - 8 months ago
- GordonGekko created a new valuation of $6.44 (overvalued by 1.83%) - 11 months ago
- SethWellbourne created a new valuation of $7.44 (undervalued by 2.76%) - 11 months ago
- GordonGekko created a new valuation of $4.52 (overvalued by 3.21%) - 1 year ago
- GordonGekko created a new valuation of $10.23 (undervalued by 15.46%) - 1 year ago
- KiwiEMH created a new valuation of $10.30 (undervalued by 0.29%) - 1 year ago
- TheCrunchBlog created a new valuation of $11.64 (undervalued by 14.01%) - 1 year ago
- GordonGekko created a new valuation of $11.32 (undervalued by 8.53%) - 1 year ago
- KiwiEMH created a new valuation of $13.12 (undervalued by 0.31%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 5,541 |
| Net Debt (Long-term borrowings less cash): | -1,608 |
| Equity Value: | 6,893 |
| Number of Shares Outstanding: | 753,000,000 |
| Calculated value per share: | $4.16 |
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.