Monsanto Company (MON)
Discount cash flow analysis
5% margin of safety What's this?
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $82.52 | $81.13 | $79.78 | |
| Terminal Growth% | 0 | $83.06 | $81.64 | $80.29 |
| +1% | $83.60 | $82.17 | $80.80 |
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 $82.09 (undervalued by 13.6%) - 3 minutes ago
- dweis created a new valuation of $69.50 (overvalued by 7.1%) - 1 year ago
- TheCrunchBlog created a new valuation of $82.63 (overvalued by 5.39%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 39,277 |
| Net Debt (Long-term borrowings less cash): | -153 |
| Equity Value: | 41,875 |
| Number of Shares Outstanding: | 545,000,000 |
| Calculated value per share: | $81.64 |
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.