CFD discounter

Hi all!

I am working on a replication of the buffett books calculator, I am wondering how I can calculate the discounted perpetuity cash flow. When I calculate it, it is too high.

On top of that, I have trouble calculating the expected return on the current stock price. I hope that someone could help me with the formula's and perhaps an example!

Thank you in advance!

Kind regards,

Tim

Comments

  • edited March 16
    You need to use a terminal value. You can't use the same growth rate in perpetuity. Eventually, you'll have to adjust your growth rate and use a terminal value.If I am understanding correctly that is your problem.
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