WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 1.74 | 0.8933 | 1.55 | 1.55 |
| 2 | 1.77 | 0.7979 | 1.41 | 2.97 |
| 3 | 1.81 | 0.7127 | 1.29 | 4.25 |
| 4 | 1.84 | 0.6367 | 1.17 | 5.43 |
| 5 | 1.88 | 0.5687 | 1.07 | 6.50 |
| 6 | 1.92 | 0.5080 | 0.97 | 7.47 |
| 7 | 1.96 | 0.4538 | 0.89 | 8.36 |
| 8 | 2.00 | 0.4053 | 0.81 | 9.17 |
| 9 | 2.04 | 0.3621 | 0.74 | 9.91 |
| 10 | 2.08 | 0.3234 | 0.67 | 10.58 |
| 11 | 2.13 | 0.2889 | 0.61 | 11.19 |
| 12 | 2.18 | 0.2581 | 0.56 | 11.76 |
| 13 | 2.24 | 0.2305 | 0.52 | 12.27 |
| 14 | 2.29 | 0.2059 | 0.47 | 12.74 |
| 15 | 2.35 | 0.1839 | 0.43 | 13.17 |
| 16 | 2.41 | 0.1643 | 0.40 | 13.57 |
| 17 | 2.47 | 0.1468 | 0.36 | 13.93 |
| 18 | 2.53 | 0.1311 | 0.33 | 14.26 |
| 19 | 2.59 | 0.1171 | 0.30 | 14.57 |
| 20 | 2.66 | 0.1046 | 0.28 | 14.85 |
REVERSE DCF
At $89.08, the market implies a stage-1 growth rate of 29.7%.
MARKET IMPLIES
29.7%
YOUR ASSUMPTION
2.0%
DELTA
+27.7pp
If $89.08 is correct and your other inputs (WACC 11.9%, 10+10y, terminal 2.5%) hold, the market needs KO to grow cash flow at 29.7% annually for the next 10 years.