DCF Calculator
TutorialValue a stock based on its free cash flow and a 10-year discounted cash flow (DCF) model.
Assumptions
- Current Price
- $100.00
Fair value by discount rate and terminal growth
Green cells are above the current price, red cells below. The outlined cell is your current assumption.
| Discount Rate ↓ / Terminal Growth → | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.0% | $165.81 | $176.99 | $190.65 | $207.73 | $229.70 |
| 8.0% | $138.56 | $145.81 | $154.38 | $164.66 | $177.23 |
| 9.0% | $118.66 | $123.62 | $129.34 | $136.01 | $143.90 |
| 10.0% | $103.52 | $107.04 | $111.04 | $115.60 | $120.87 |
| 11.0% | $91.62 | $94.21 | $97.09 | $100.34 | $104.03 |
How the Discounted Cash Flow method works
The model projects free cash flow per share for the next 10 years using two growth rates, then assumes the cash flows keep growing at the terminal rate forever. Every year is discounted back to today at the discount rate, and the sum is the fair value. The discount rate has the biggest effect on the result, so the sensitivity table shows how the fair value moves as it changes.
Fair Value = Σ FCFₜ / (1 + r)ᵗ + Terminal Value / (1 + r)¹⁰
These models are estimates that depend entirely on your assumptions. They are provided for educational purposes only and are not investment advice. If you prefer a different valuation approach, try the Fair Value Calculator.