Calculating fair value...
Calculating WACC...
A DCF estimates what a business is worth today by projecting its future cash flows and discounting them back to the present using a required rate of return. This calculator uses owner earnings as the cash flow base and lets you set your own growth and discount assumptions.
WACC is the weighted average cost of capital, a blended cost of a company's equity and debt financing. It is commonly used as the discount rate in a DCF because it reflects the return investors require to hold the business. A higher WACC lowers the present value of future cash flows.
Many investors use the company's WACC, often in the range of about 6 to 15%, with higher rates for riskier or less predictable businesses. There is no single correct number, so it is good practice to test a range of rates and see how sensitive the fair value is to your assumption.