The Procter & Gamble Company (PG)
Discount cash flow analysis
5% margin of safety What's this?
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $65.42 | $64.32 | $63.24 | |
| Terminal Growth% | 0 | $65.80 | $64.69 | $63.60 |
| +1% | $66.19 | $65.06 | $63.96 |
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 $64.88 (undervalued by 1.85%) - 11 hours ago
- aolpz created a new valuation of $61.56 (undervalued by 8.61%) - 5 months ago
- GordonGekko created a new valuation of $60.90 (undervalued by 25.39%) - 11 months ago
- www980 created a new valuation of $74.77 (undervalued by 55.58%) - 11 months ago
- www980 created a new valuation of $74.77 (undervalued by 55.58%) - 11 months ago
- nzvikram created a new valuation of $55.77 (undervalued by 9.07%) - 1 year ago
- dweis created a new valuation of $56.73 (overvalued by 11.7%) - 1 year ago
- dct73 created a new valuation of $58.38 (overvalued by 9.35%) - 1 year ago
- TheCrunchBlog created a new valuation of $72.92 (undervalued by 15.82%) - 1 year ago
- Diegoengel created a new valuation of $73.46 (undervalued by 15.43%) - 1 year ago
- ffarin created a new valuation of $69.67 (undervalued by 14.57%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 217,213 |
| Net Debt (Long-term borrowings less cash): | 32,191 |
| Equity Value: | 177,209 |
| Number of Shares Outstanding: | 2,904,000,000 |
| Calculated value per share: | $64.69 |
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.