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DCF Calculator
Discounted Cash Flow — the cornerstone of equity valuation.
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Frequently asked questions
What is WACC?
Weighted Average Cost of Capital — blend of equity and debt cost. Equity cost via CAPM (RF + β × market premium). Typical: 8–14% for Indian mid/large caps.
Why is terminal value so important?
Usually 60–80% of DCF value. Small changes in terminal growth swing total valuation massively. Be conservative — 2–4% is typical for mature economies.
DCF vs comparable valuation?
DCF is theoretically sound but sensitive to assumptions. Comps (P/E, EV/EBITDA) reflect market sentiment. Use both and triangulate.
Can DCF lie?
Yes — optimistic growth + low WACC = any valuation you want. Analysts reverse-engineer DCF to match desired price. Validate assumptions against history.