Reverse DCF

What growth rate is the market pricing into the current valuation?

Market value ($)

Starting FCF ($)

High-growth years: 10Terminal growth: 2.5%Discount rate: 9%

Implied 10-year growth rate

8.6%/yr

Required to justify $50.00B at FCF $2.00B, terminal 2.5%, discount 9%.

Modest expectations — under 10%/yr is achievable for many quality businesses.

Formula

Numerical solve: find g₁ such that Σ FCF₀(1+g₁)^t/(1+r)^t + TV/(1+r)ⁿ = MarketCap. We bisect over [−10%, +50%].

Illustrative only. Calculator outputs assume constant inputs and ignore taxes, fees, inflation, and market volatility unless stated. For research and educational purposes only — not financial advice.