The New Zealand Refining Company Limited (NZR)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $5.83 | $5.74 | $5.66 | |
| Terminal Growth% | 0 | $5.85 | $5.76 | $5.68 |
| +1% | $5.87 | $5.78 | $5.70 |
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 $5.11 (undervalued by 66.45%) - 19 hours ago
- GordonGekko created a new valuation of $5.55 (overvalued by 20.71%) - 1 year ago
- GordonGekko created a new valuation of $6.05 (overvalued by 12.32%) - 1 year ago
- KiwiEMH created a new valuation of $5.76 (overvalued by 1.54%) - 1 year ago
- Yardiff created a new valuation of $5.32 (overvalued by 21.76%) - 1 year ago
- KiwiEMH created a new valuation of $6.99 (undervalued by 2.79%) - 1 year ago
- GordonGekko created a new valuation of $7.05 (overvalued by 9.96%) - over 2 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 730 |
| Net Debt (Long-term borrowings less cash): | -6 |
| Equity Value: | 1,404 |
| Number of Shares Outstanding: | 240,000,000 |
| Calculated value per share: | $5.76 |
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.