Equity DCF Valuation Calculator
Estimate equity value from projected FCFE using an explicit growth period and a constant growth terminal value.
Earlier editorial review
- Reviewed
- 2026-09-18
- Methodology
- 1.0
Sources
How the calculation works
Enter positive current FCFE, annual FCFE growth, equity discount rate, terminal growth, and a whole number of projection years. Shares and share price are optional. Use the same currency throughout. FCFE and diluted shares must use matching scale, while price is entered as currency per share.
The calculator projects FCFE for each year and discounts each amount at year end. It then calculates a growing perpetuity from the final projected FCFE and discounts that terminal value back to the present.
The example uses FCFE of 1,000,000 USD, growth of 10%, discount rate of 12%, terminal growth of 3%, five years, 1,000,000 shares, and price of 25 USD per share. It gives equity value of 15,196,902.54 USD, terminal value present value of 10,458,466.94 USD, and value per share of 15.20 USD.
Margin of safety uses estimated value per share as its denominator. A negative result means the entered price is above the estimate under these assumptions. It is not the percentage gain to the estimate, and it is not a recommendation.
Step by step
- Enter FCFE, annual growth, equity discount rate, terminal growth, and projection years.
- Optionally enter diluted shares and a manually supplied share price.
- Review projected FCFE, present values, terminal value, and any available per share comparison.
Worked example
Enter base year FCFE of 1,000,000 USD, annual FCFE growth of 10%, equity discount rate of 12%, terminal growth of 3%, five projection years, 1,000,000 diluted shares, and a manually entered share price of 25 USD per share. FCFE and share count use the same full unit scale.
The estimated equity value is 15,196,902.54 USD. Present value of the terminal value is 10,458,466.94 USD, value per share is 15.20 USD, and margin of safety versus 25 USD per share is negative 64.51%. The explicit annual cash flow present values sum to 4,738,435.60 USD.
When this model is useful
Use this model to examine how stated FCFE and growth assumptions translate into an equity value under a constant growth framework.
Vary one assumption at a time and compare scenarios. The estimate alone does not establish a market price or whether an investment suits you.
Common input mistakes
FCFE and FCFF are different cash flow measures. Pair FCFE with a cost of equity. Do not use FCFF with an unadjusted cost of equity or interpret the result as enterprise value.
Match the scale of FCFE and diluted shares. Enter share price in the same currency per share, not in millions. The price is optional and manual. The calculator does not fetch or store it.
Formula and conventions
For each projected year t: FCFEₜ = FCFE₀ × (1 + g)ᵗ
Present valueₜ = FCFEₜ ÷ (1 + r)ᵗ
Terminal value at year n = FCFEₙ × (1 + gₜ) ÷ (r − gₜ)
Present value of terminal value = Terminal value ÷ (1 + r)ⁿ
Estimated equity value = Σ present valueₜ + present value of terminal value
Value per share = estimated equity value ÷ diluted shares
Margin of safety = (value per share − entered share price) ÷ value per share × 100
This is an equity cash flow model. Enter FCFE and an equity required return. FCFF generally pairs with WACC to estimate firm value, followed by a separate net debt bridge to equity value. This calculator does not perform that firm valuation or bridge. Terminal growth must be below the discount rate. The projection uses the same annual growth rate in every explicit year.
Limitations and assumptions
The model uses one growth rate during the explicit projection and a constant growth perpetuity afterward. It discounts year end FCFE at an equity required return. It does not model changing margins, reinvestment needs, debt schedules, cash balances, taxes, fees, dilution, or multiple growth stages, and it does not subtract net debt. Terminal value can be sensitive to the gap between discount rate and terminal growth. Values outside the supported numeric range are withheld.
Key terms
- FCFE
- Free cash flow available to equity holders after financing cash flows. This calculator uses it as the projected cash flow.
- Equity discount rate
- The annual required return used to discount equity cash flows to present value.
- Terminal value
- The value at the end of the explicit projection for cash flows assumed to grow at a constant rate thereafter.
Compare cash flow measures
Free Cash Flow Yield uses current free cash flow relative to equity value. The FCFF to FCFE Bridge explains adjustments between firm cash flow and equity cash flow. This calculator discounts FCFE at an equity required return.
Compare scenarios by changing one assumption at a time. FCFF belongs in a firm valuation using WACC, followed by a net debt bridge from firm value to equity value. This calculator instead uses FCFE directly.
FAQ
What does this DCF calculator estimate?
This calculator estimates equity value by projecting free cash flow to equity, or FCFE, then discounting those amounts at an equity required return. It applies one growth rate over the explicit years and a constant growth perpetuity afterward. The output is conditional on those inputs, not a market forecast.
Which cash flow and discount rate belong together?
This model expects FCFE and an equity discount rate. FCFF is a firm cash flow measure. To use FCFF, value the firm using WACC, then make a separate net debt and other claims bridge to equity value. Subtracting net debt from annual FCFF does not convert it to FCFE.
How are per share value and margin of safety calculated?
The calculator sums the present values of the projected annual FCFE and the terminal value. It divides equity value by diluted shares when a positive share count is entered. Margin of safety is (estimated value per share minus entered share price) divided by estimated value per share, times 100. It is not the percentage upside measured from price.
Why can small assumption changes matter?
The result can change substantially when growth, the equity discount rate, terminal growth, or the projection period changes. Terminal value may make up a large part of the estimate. Compare clearly stated scenarios rather than treating one set of assumptions as precise.
Which related tools provide a useful comparison?
Free Cash Flow Yield compares free cash flow with equity value using its own definition. The FCFF to FCFE Bridge describes firm cash flow and debt related adjustments. Use matching definitions when comparing those tools with this equity cash flow valuation.
Related tools
Compare the equity cash flow basis with Free Cash Flow Yield and the FCFF to FCFE Bridge. Their cash flow definitions differ, so check each method before interpreting a difference.