WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 4.23 | 0.8973 | 3.80 | 3.80 |
| 2 | 4.32 | 0.8052 | 3.48 | 7.28 |
| 3 | 4.41 | 0.7225 | 3.18 | 10.46 |
| 4 | 4.49 | 0.6483 | 2.91 | 13.37 |
| 5 | 4.58 | 0.5818 | 2.67 | 16.04 |
| 6 | 4.67 | 0.5220 | 2.44 | 18.48 |
| 7 | 4.77 | 0.4684 | 2.23 | 20.71 |
| 8 | 4.86 | 0.4203 | 2.04 | 22.76 |
| 9 | 4.96 | 0.3772 | 1.87 | 24.63 |
| 10 | 5.06 | 0.3385 | 1.71 | 26.34 |
| 11 | 5.19 | 0.3037 | 1.58 | 27.92 |
| 12 | 5.32 | 0.2725 | 1.45 | 29.37 |
| 13 | 5.45 | 0.2445 | 1.33 | 30.70 |
| 14 | 5.59 | 0.2194 | 1.23 | 31.92 |
| 15 | 5.73 | 0.1969 | 1.13 | 33.05 |
| 16 | 5.87 | 0.1767 | 1.04 | 34.09 |
| 17 | 6.01 | 0.1585 | 0.95 | 35.04 |
| 18 | 6.17 | 0.1423 | 0.88 | 35.92 |
| 19 | 6.32 | 0.1277 | 0.81 | 36.73 |
| 20 | 6.48 | 0.1146 | 0.74 | 37.47 |
REVERSE DCF
At $61.24, the market implies a stage-1 growth rate of 9.7%.
MARKET IMPLIES
9.7%
YOUR ASSUMPTION
2.0%
DELTA
+7.7pp
If $61.24 is correct and your other inputs (WACC 11.4%, 10+10y, terminal 2.5%) hold, the market needs BHP.AX to grow cash flow at 9.7% annually for the next 10 years.