Verizon Communications Inc. (VZ)
Discount cash flow analysis
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $28.46 | $27.99 | $27.53 | |
| Terminal Growth% | 0 | $28.54 | $28.07 | $27.60 |
| +1% | $28.62 | $28.15 | $27.68 |
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 $107.87 (undervalued by 256.48%) - 8 hours ago
- mvacca created a new valuation of $52.47 (undervalued by 74.73%) - 17 days ago
- mvacca created a new valuation of $52.47 (undervalued by 74.73%) - 17 days ago
- mvacca created a new valuation of $67.05 (undervalued by 123.28%) - 17 days ago
- mvacca created a new valuation of $107.65 (undervalued by 258.47%) - 17 days ago
- mvacca created a new valuation of $107.65 (undervalued by 258.47%) - 17 days ago
- mvacca created a new valuation of $111.30 (undervalued by 270.63%) - 17 days ago
- mvacca created a new valuation of $108.03 (undervalued by 259.74%) - 17 days ago
- mvacca created a new valuation of $99.65 (undervalued by 231.83%) - 17 days ago
- mvacca created a new valuation of $99.53 (undervalued by 231.44%) - 17 days ago
- SethWellbourne created a new valuation of $38.62 (undervalued by 27.8%) - 1 year ago
- jesse82 created a new valuation of $28.07 (overvalued by 2.57%) - 1 year ago
- TheCrunchBlog created a new valuation of $37.77 (undervalued by 19.34%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 127,629 |
| Net Debt (Long-term borrowings less cash): | 41,661 |
| Equity Value: | 81,849 |
| Number of Shares Outstanding: | 2,841,000,000 |
| Calculated value per share: | $28.07 |
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.