WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 3.22 | 0.9141 | 2.94 | 2.94 |
| 2 | 3.28 | 0.8357 | 2.74 | 5.68 |
| 3 | 3.35 | 0.7639 | 2.56 | 8.24 |
| 4 | 3.41 | 0.6983 | 2.38 | 10.62 |
| 5 | 3.48 | 0.6384 | 2.22 | 12.84 |
| 6 | 3.55 | 0.5835 | 2.07 | 14.92 |
| 7 | 3.62 | 0.5334 | 1.93 | 16.85 |
| 8 | 3.69 | 0.4876 | 1.80 | 18.65 |
| 9 | 3.77 | 0.4458 | 1.68 | 20.33 |
| 10 | 3.84 | 0.4075 | 1.57 | 21.90 |
| 11 | 3.94 | 0.3725 | 1.47 | 23.36 |
| 12 | 4.04 | 0.3405 | 1.38 | 24.74 |
| 13 | 4.14 | 0.3113 | 1.29 | 26.03 |
| 14 | 4.24 | 0.2846 | 1.21 | 27.24 |
| 15 | 4.35 | 0.2601 | 1.13 | 28.37 |
| 16 | 4.46 | 0.2378 | 1.06 | 29.43 |
| 17 | 4.57 | 0.2174 | 0.99 | 30.42 |
| 18 | 4.68 | 0.1987 | 0.93 | 31.35 |
| 19 | 4.80 | 0.1817 | 0.87 | 32.22 |
| 20 | 4.92 | 0.1661 | 0.82 | 33.04 |
REVERSE DCF
At $57.99, the market implies a stage-1 growth rate of 10.5%.
MARKET IMPLIES
10.5%
YOUR ASSUMPTION
2.0%
DELTA
+8.5pp
If $57.99 is correct and your other inputs (WACC 9.4%, 10+10y, terminal 2.5%) hold, the market needs BHP.AX to grow cash flow at 10.5% annually for the next 10 years.