General Electric Company (GE)
Discount cash flow analysis
5% margin of safety What's this?
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $11.28 | $10.46 | $9.67 | |
| Terminal Growth% | 0 | $11.58 | $10.76 | $9.95 |
| +1% | $11.89 | $11.05 | $10.24 |
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 $15.00 (overvalued by 11.97%) - 2 hours ago
- pbemech created a new valuation of $14.90 (overvalued by 6.29%) - 13 days ago
- GordonGekko created a new valuation of $14.68 (overvalued by 8.88%) - 1 month ago
- baselsina created a new valuation of $18.75 (undervalued by 16.39%) - 1 month ago
- jtwdc1 created a new valuation of $0.00 (overvalued by 100.0%) - 4 months ago
- GordonGekko created a new valuation of $0.00 (overvalued by 100.0%) - 5 months ago
- Yuvraj created a new valuation of $63.82 (undervalued by 376.27%) - 7 months ago
- Yuvraj created a new valuation of $12.76 (overvalued by 4.78%) - 7 months ago
- Yuvraj created a new valuation of $7.15 (overvalued by 46.64%) - 7 months ago
- natet1 created a new valuation of $12.82 (undervalued by 18.05%) - 8 months ago
- SethWellbourne created a new valuation of $0.00 (overvalued by 100.0%) - 11 months ago
- jtmoney15 created a new valuation of $10.76 (undervalued by 11.39%) - 12 months ago
- GordonGekko created a new valuation of $10.76 (undervalued by 11.85%) - 12 months ago
- dweis created a new valuation of $37.74 (undervalued by 135.58%) - 1 year ago
- wyomingkid created a new valuation of $63.76 (undervalued by 226.81%) - 1 year ago
- Derek created a new valuation of $21.62 (undervalued by 14.03%) - 1 year ago
- GordonGekko created a new valuation of $20.88 (overvalued by 18.12%) - 1 year ago
- peypar created a new valuation of $11.23 (overvalued by 55.52%) - 1 year ago
- GordonGekko created a new valuation of $24.95 (overvalued by 6.27%) - 1 year ago
- Ashkat created a new valuation of $46.68 (undervalued by 66.12%) - 1 year ago
- KiwiEMH created a new valuation of $26.49 (overvalued by 7.73%) - 1 year ago
- GordonGekko created a new valuation of $27.01 (overvalued by 1.35%) - 1 year ago
- TheCrunchBlog created a new valuation of $36.16 (undervalued by 32.07%) - 1 year ago
- GordonGekko created a new valuation of $29.39 (undervalued by 7.34%) - 1 year ago
- GordonGekko created a new valuation of $31.30 (undervalued by 0.94%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 655,524 |
| Net Debt (Long-term borrowings less cash): | 475,575 |
| Equity Value: | 101,591 |
| Number of Shares Outstanding: | 10,560,000,000 |
| Calculated value per share: | $10.76 |
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.