WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 6.62 | 0.9304 | 6.16 | 6.16 |
| 2 | 6.83 | 0.8657 | 5.92 | 12.08 |
| 3 | 7.05 | 0.8054 | 5.68 | 17.76 |
| 4 | 7.28 | 0.7494 | 5.45 | 23.21 |
| 5 | 7.51 | 0.6972 | 5.24 | 28.44 |
| 6 | 7.75 | 0.6487 | 5.03 | 33.47 |
| 7 | 7.99 | 0.6036 | 4.83 | 38.30 |
| 8 | 8.25 | 0.5616 | 4.63 | 42.93 |
| 9 | 8.51 | 0.5225 | 4.45 | 47.38 |
| 10 | 8.78 | 0.4861 | 4.27 | 51.65 |
| 11 | 9.00 | 0.4523 | 4.07 | 55.72 |
| 12 | 9.23 | 0.4208 | 3.88 | 59.60 |
| 13 | 9.46 | 0.3916 | 3.70 | 63.31 |
| 14 | 9.70 | 0.3643 | 3.53 | 66.84 |
| 15 | 9.94 | 0.3390 | 3.37 | 70.21 |
| 16 | 10.19 | 0.3154 | 3.21 | 73.42 |
| 17 | 10.44 | 0.2934 | 3.06 | 76.48 |
| 18 | 10.70 | 0.2730 | 2.92 | 79.41 |
| 19 | 10.97 | 0.2540 | 2.79 | 82.19 |
| 20 | 11.24 | 0.2363 | 2.66 | 84.85 |
REVERSE DCF
At $159.03, the market implies a stage-1 growth rate of 12.2%.
MARKET IMPLIES
12.2%
YOUR ASSUMPTION
3.2%
DELTA
+9.0pp
If $159.03 is correct and your other inputs (WACC 7.5%, 10+10y, terminal 2.5%) hold, the market needs PG to grow cash flow at 12.2% annually for the next 10 years.