WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 6.34 | 0.9328 | 5.92 | 5.92 |
| 2 | 6.47 | 0.8701 | 5.63 | 11.55 |
| 3 | 6.60 | 0.8116 | 5.36 | 16.90 |
| 4 | 6.73 | 0.7570 | 5.10 | 22.00 |
| 5 | 6.87 | 0.7062 | 4.85 | 26.85 |
| 6 | 7.00 | 0.6587 | 4.61 | 31.46 |
| 7 | 7.14 | 0.6144 | 4.39 | 35.85 |
| 8 | 7.29 | 0.5731 | 4.18 | 40.02 |
| 9 | 7.43 | 0.5346 | 3.97 | 44.00 |
| 10 | 7.58 | 0.4987 | 3.78 | 47.78 |
| 11 | 7.77 | 0.4651 | 3.61 | 51.39 |
| 12 | 7.96 | 0.4339 | 3.46 | 54.84 |
| 13 | 8.16 | 0.4047 | 3.30 | 58.15 |
| 14 | 8.37 | 0.3775 | 3.16 | 61.31 |
| 15 | 8.58 | 0.3521 | 3.02 | 64.33 |
| 16 | 8.79 | 0.3285 | 2.89 | 67.21 |
| 17 | 9.01 | 0.3064 | 2.76 | 69.97 |
| 18 | 9.24 | 0.2858 | 2.64 | 72.61 |
| 19 | 9.47 | 0.2666 | 2.52 | 75.14 |
| 20 | 9.70 | 0.2487 | 2.41 | 77.55 |
REVERSE DCF
At $148.88, the market implies a stage-1 growth rate of 11.4%.
MARKET IMPLIES
11.4%
YOUR ASSUMPTION
2.0%
DELTA
+9.4pp
If $148.88 is correct and your other inputs (WACC 7.2%, 10+10y, terminal 2.5%) hold, the market needs PG to grow cash flow at 11.4% annually for the next 10 years.