DCF (Discounted Cash Flow) Valuation Model
Enter Valuation Inputs
Enter the components to calculate WACC, or directly input the WACC below if known.
Typically calculated using CAPM (Risk-Free Rate + Beta * Market Risk Premium).
DCF Valuation Results
Enter data and click 'Calculate Valuation' to see results.
About This Tool
This Discounted Cash Flow (DCF) Valuation Model estimates the intrinsic value of a company based on its projected free cash flows. It uses the fundamental principle that the value of a business is the present value of its future cash flows.
**Key Components & Calculations:**
- **Free Cash Flow (FCF):** The cash generated by a company after accounting for cash outflows to support operations and maintain its capital assets. You will input projected FCF for a specified number of years.
- **Terminal Value (TV):** Represents the value of the company's cash flows beyond the explicit forecast period. It is typically calculated using the Gordon Growth Model, assuming a constant growth rate of FCF into perpetuity. $$TV = \frac{FCF_{last\_year} \times (1 + g)}{WACC - g}$$ Where $g$ is the Perpetual Growth Rate.
- **Weighted Average Cost of Capital (WACC):** The average rate of return a company expects to pay to all its security holders to finance its assets. It's used as the discount rate to bring future cash flows to their present value. $$WACC = \left(\frac{E}{V} \times Re\right) + \left(\frac{D}{V} \times Rd \times (1 - T)\right)$$ Where: $E = \text{Market Value of Equity}$ $D = \text{Market Value of Debt}$ $V = E + D$ (Total Value of Capital) $Re = \text{Cost of Equity}$ $Rd = \text{Cost of Debt}$ $T = \text{Corporate Tax Rate}$
- **Enterprise Value:** The total value of a company, including both equity and debt, unencumbered by cash. It is the sum of the Present Value of Projected FCFs and the Present Value of the Terminal Value.
- **Equity Value:** The value of the company attributable to shareholders. It is derived from Enterprise Value by adding Cash & Equivalents and subtracting Total Debt.
- **Per Share Value:** The Equity Value divided by the number of Current Shares Outstanding.
This tool is designed for universal utility and uses the US Dollar ($) as the default currency symbol. It allows users to define time parameters without being tied to specific calendar years.