Discounted Cash Flow (DCF) Calculator
Estimate the intrinsic value of an investment using the DCF method. Ideal for financial analysts and investors to calculate Enterprise Value based on projected Free Cash Flows (FCF) and WACC.
Model Inputs
Projected Free Cash Flow (Millions)
About
The Discounted Cash Flow (DCF) model is the gold standard in absolute valuation. It relies on the principle that the value of an asset today is equal to the sum of its future cash flows, discounted back to the present. This tool simplifies the complex modeling process, allowing investors to input projected Free Cash Flows (FCF) and apply a Weighted Average Cost of Capital (WACC) as the discount rate.
Sensitivity to inputs is the main constraint of DCF analysis. Small changes in the Terminal Growth Rate or the Discount Rate can drastically alter the Estimated Share Price. This calculator computes the Terminal Value using the Gordon Growth Method, assuming the company grows at a stable rate into perpetuity after the projection period.
Formulas
The intrinsic value V0 is the sum of the Present Value (PV) of projected cash flows CF and the PV of the Terminal Value TV.
Where r is the discount rate (WACC) and TV is calculated using the Gordon Growth Model with a perpetual growth rate g:
Reference Data
| Industry Sector | Avg. Cost of Equity | Avg. Cost of Debt (After-tax) | Avg. WACC |
|---|---|---|---|
| Technology (Software) | 9.5% | 3.5% | 8.9% |
| Semiconductors | 10.2% | 3.2% | 9.8% |
| Biotechnology | 11.0% | 4.5% | 10.4% |
| Retail (Online) | 9.0% | 3.8% | 8.5% |
| Automotive | 10.5% | 3.5% | 7.8% |
| Energy (Oil & Gas) | 11.5% | 4.8% | 8.2% |
| Utilities | 6.5% | 3.0% | 5.4% |
| Real Estate (REITs) | 7.5% | 3.2% | 6.1% |
| Banks (Regional) | 9.2% | 3.6% | 7.0% |
| Consumer Staples | 6.8% | 3.1% | 6.2% |
| Telecommunications | 7.8% | 3.9% | 6.7% |
| Healthcare Services | 8.5% | 3.6% | 7.5% |