WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 6.34 | 0.9338 | 5.92 | 5.92 |
| 2 | 6.47 | 0.8721 | 5.64 | 11.57 |
| 3 | 6.60 | 0.8144 | 5.37 | 16.94 |
| 4 | 6.73 | 0.7605 | 5.12 | 22.06 |
| 5 | 6.87 | 0.7102 | 4.88 | 26.93 |
| 6 | 7.00 | 0.6632 | 4.64 | 31.58 |
| 7 | 7.14 | 0.6193 | 4.42 | 36.00 |
| 8 | 7.29 | 0.5784 | 4.21 | 40.22 |
| 9 | 7.43 | 0.5401 | 4.01 | 44.23 |
| 10 | 7.58 | 0.5044 | 3.82 | 48.05 |
| 11 | 7.77 | 0.4710 | 3.66 | 51.71 |
| 12 | 7.96 | 0.4399 | 3.50 | 55.22 |
| 13 | 8.16 | 0.4108 | 3.35 | 58.57 |
| 14 | 8.37 | 0.3836 | 3.21 | 61.78 |
| 15 | 8.58 | 0.3582 | 3.07 | 64.85 |
| 16 | 8.79 | 0.3345 | 2.94 | 67.79 |
| 17 | 9.01 | 0.3124 | 2.81 | 70.61 |
| 18 | 9.24 | 0.2917 | 2.69 | 73.30 |
| 19 | 9.47 | 0.2724 | 2.58 | 75.88 |
| 20 | 9.70 | 0.2544 | 2.47 | 78.35 |
REVERSE DCF
At $146.54, the market implies a stage-1 growth rate of 11.0%.
MARKET IMPLIES
11.0%
YOUR ASSUMPTION
2.0%
DELTA
+9.0pp
If $146.54 is correct and your other inputs (WACC 7.1%, 10+10y, terminal 2.5%) hold, the market needs PG to grow cash flow at 11.0% annually for the next 10 years.