Discounted Cash Flow(DCF) Calculator
It is an online tool for investment and used to figure out the net present value / discounted cash flow / calculated fair value of an investment.
Results
Terminology Used in this Calculator :
Earnings Growth (%) - Expected Annual rate of growth for earnings per share.
Discount Rate (%) - guaranteed return.
Years of Above Growth - Number of years to use near term growth numbers.
Perpetual Growth (%) - Perpetual growth in EPS or FCFPS after the near term growth ends.
Discounted Cash Flow Formula
The discounted cash flow is a quantification method used to evaluate the attractiveness of an investment opportunity.Discounted Cash Flow is a term used to describe what your future cash flow is worth in today's value. This is also known as the present value (PV) of a future cash flow.
DCF Formula = CFt /( 1 +r)t
DCF = discounted cash flow
R = appropriate discount rate given the riskiness of the cash flows
t = life of the asset, which is valued.
Perpetual Growth Rate Method, the terminal value is calculated as
TVn = CFn (1+g)/( WACC-g)
TVn = Terminal Value at the end of the specified period
CFn = represents the cash flow of the last specified period
g = growth rate
WACC = Weighted Average Cost of Capital.
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