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10 June 2008 | 185 views
Valuation Assumptions What are these?
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Discount
Rate (%)
Terminal
Growth (%)
Tax (%)
Dollar19Point24
Arrow_up_green81.51% from latest share price

Revenue ($ million)

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2008 2009 2010 2011
 
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Profitability (EBITDA) Margin (%)

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2008 2009 2010 2011
 
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Comments (1)


Running The Numbers – Dell ($DELL) Has Fallen Too Far

This valuation is part of this blog post:

http://blog.valuecruncher.com/2008/10/running-the-numbers-dell-has-fallen-too-far/

Our assumptions are revenues of US$65.0 billion in 2009 growing to US$70.0 billion in 2011. We have used a flat EBITDA margin of 6.5% to 2010 and then 7% in 2011. Our terminal growth rate is 3.0%. We used a terminal capital expenditure number of US$800 million. Our WACC (discount rate) is 12.0%. All of these assumptions can be amended in the Valuecruncher on-line valuation model to adjust the valuation. Our analysis incorporates the cash and debt on the $DELL balance sheet – Valuecruncher calculates a net debt number.

We believe that our assumptions are reasonably conservative. The near-term revenues and profitability are very achievable. The terminal growth rate is about the US economic long-term growth rate. The discount rate of 12% is reasonably high reflecting the uncertainty around $DELL.

By TheCrunchBlog, about 1 month ago


Valuation Details

Member: TheCrunchBlog
On: 06 Oct 2008
Views: 185
Comments: 1
Latest Share Price: $10.60
Updated: 4 hours ago
Ticker: DELL
Market: NASD