WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 16.40 | 0.9091 | 14.91 | 14.91 |
| 2 | 17.16 | 0.8264 | 14.18 | 29.09 |
| 3 | 17.94 | 0.7513 | 13.48 | 42.57 |
| 4 | 18.77 | 0.6830 | 12.82 | 55.39 |
| 5 | 19.63 | 0.6209 | 12.19 | 67.58 |
| 6 | 20.53 | 0.5644 | 11.59 | 79.17 |
| 7 | 21.48 | 0.5131 | 11.02 | 90.19 |
| 8 | 22.46 | 0.4665 | 10.48 | 100.67 |
| 9 | 23.49 | 0.4241 | 9.96 | 110.63 |
| 10 | 24.57 | 0.3855 | 9.47 | 120.10 |
| 11 | 25.19 | 0.3505 | 8.83 | 128.93 |
| 12 | 25.82 | 0.3186 | 8.22 | 137.15 |
| 13 | 26.46 | 0.2896 | 7.66 | 144.82 |
| 14 | 27.12 | 0.2633 | 7.14 | 151.96 |
| 15 | 27.80 | 0.2394 | 6.65 | 158.61 |
| 16 | 28.50 | 0.2176 | 6.20 | 164.82 |
| 17 | 29.21 | 0.1978 | 5.78 | 170.59 |
| 18 | 29.94 | 0.1798 | 5.38 | 175.98 |
| 19 | 30.69 | 0.1635 | 5.02 | 180.99 |
| 20 | 31.45 | 0.1486 | 4.67 | 185.67 |
REVERSE DCF
At $546.09, the market implies a stage-1 growth rate of 20.7%.
MARKET IMPLIES
20.7%
YOUR ASSUMPTION
4.6%
DELTA
+16.1pp
If $546.09 is correct and your other inputs (WACC 10.0%, 10+10y, terminal 2.5%) hold, the market needs BRK-B to grow cash flow at 20.7% annually for the next 10 years.