WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 16.52 | 0.9122 | 15.07 | 15.07 |
| 2 | 17.28 | 0.8321 | 14.38 | 29.44 |
| 3 | 18.07 | 0.7590 | 13.72 | 43.16 |
| 4 | 18.90 | 0.6924 | 13.09 | 56.24 |
| 5 | 19.77 | 0.6316 | 12.48 | 68.73 |
| 6 | 20.68 | 0.5761 | 11.91 | 80.64 |
| 7 | 21.63 | 0.5255 | 11.36 | 92.00 |
| 8 | 22.62 | 0.4794 | 10.84 | 102.84 |
| 9 | 23.66 | 0.4373 | 10.34 | 113.19 |
| 10 | 24.74 | 0.3989 | 9.87 | 123.06 |
| 11 | 25.36 | 0.3638 | 9.23 | 132.28 |
| 12 | 26.00 | 0.3319 | 8.63 | 140.91 |
| 13 | 26.65 | 0.3027 | 8.07 | 148.98 |
| 14 | 27.31 | 0.2762 | 7.54 | 156.52 |
| 15 | 27.99 | 0.2519 | 7.05 | 163.57 |
| 16 | 28.69 | 0.2298 | 6.59 | 170.17 |
| 17 | 29.41 | 0.2096 | 6.16 | 176.33 |
| 18 | 30.15 | 0.1912 | 5.76 | 182.10 |
| 19 | 30.90 | 0.1744 | 5.39 | 187.48 |
| 20 | 31.67 | 0.1591 | 5.04 | 192.52 |
REVERSE DCF
At $488.13, the market implies a stage-1 growth rate of 18.4%.
MARKET IMPLIES
18.4%
YOUR ASSUMPTION
4.6%
DELTA
+13.8pp
If $488.13 is correct and your other inputs (WACC 9.6%, 10+10y, terminal 2.5%) hold, the market needs BRK-B to grow cash flow at 18.4% annually for the next 10 years.