AT&T Inc. (T)
Discount cash flow analysis
5% margin of safety What's this?
Price history
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $36.16 | $35.43 | $34.72 | |
| Terminal Growth% | 0 | $36.42 | $35.68 | $34.96 |
| +1% | $36.68 | $35.94 | $35.21 |
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 $28.99 (undervalued by 13.15%) - 3 hours ago
- lausan created a new valuation of $28.91 (undervalued by 14.54%) - 1 month ago
- GordonGekko created a new valuation of $29.17 (undervalued by 14.89%) - 1 month ago
- GordonGekko created a new valuation of $29.17 (undervalued by 14.89%) - 1 month ago
- jtwdc1 created a new valuation of $30.97 (undervalued by 22.36%) - 4 months ago
- jtwdc1 created a new valuation of $16.68 (overvalued by 34.1%) - 4 months ago
- SethWellbourne created a new valuation of $20.54 (overvalued by 18.36%) - 11 months ago
- GordonGekko created a new valuation of $25.19 (undervalued by 15.98%) - 1 year ago
- dweis created a new valuation of $53.73 (undervalued by 102.22%) - 1 year ago
- TheCrunchBlog created a new valuation of $39.25 (undervalued by 26.41%) - 1 year ago
- omer created a new valuation of $35.68 (overvalued by 1.95%) - 1 year ago
- GordonGekko created a new valuation of $40.73 (undervalued by 4.92%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 214,353 |
| Net Debt (Long-term borrowings less cash): | 62,145 |
| Equity Value: | 216,193 |
| Number of Shares Outstanding: | 5,941,000,000 |
| Calculated value per share: | $35.68 |
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.