Apple Inc. (AAPL) Two-Stage Excess Return Model - Discounting Cash Flows
AAPL
Apple Inc.
AAPL (NASDAQ)

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Two-Stage Excess Return Model

Used to estimate the value of companies based on two stages of growth. An initial period of high growth, represented by [Sum of discounted excess returns in Growth Stage], followed by a period of stable growth, represented by [Discounted excess return in terminal stage]. Excess Return models are better suited to calculate the intrinsic value of a financial company than an enterprise valuation model (such as the Discounted Free Cash Flow Model).

Read more: GitHub Documentation

Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate = Cost of Equity = Risk Free Rate + Beta * Market Premium

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

Read More

↳ Beta

Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.

↳ Risk Free Rate

Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.

↳ Market Premium

Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.

High Growth Years

High Growth Years

The estimated number of years during which the company is expected to experience high growth. After this period, the company will transition to a stable growth phase.

Stable Return On Equity

Stable Return on Equity

The stable Return On Equity (ROE) estimated after the last projected period.

Stable Growth In Perpetuity

Stable Growth in Perpetuity

The stable rate at which the company's book value is assumed to grow in perpetuity after the last projected period.

Historical Years

Historical Years

The number of historical years used to calculate averages for historical data.

Results

Estimated Value 200.3 USD
Book value of equity invested 4.45 USD
Sum of discounted excess returns in Growth Stage 29.87 USD
Terminal stage EPS 15.28 USD
Terminal stage Book Value 15.29 USD
Terminal stage Equity Cost 1.48 USD
Discounted excess return in terminal stage 166 USD
Excess Returns in the Terminal Stage 263.2 USD
Terminal Cost of Equity (the discount rate) 9.66%
Terminal year's excess return 13.8 USD
Average historical Return on Equity 99.95%
Average historical Payout Ratio 20.52%
Payout Ratio in stable stage 95.58%
Yield of the U.S. 10 Year Treasury Bond 4.42%

Historical and Forecasted Data

Monetary values are in USD

Edit Chart Values 2025 2026 2027 2028 2029

amounts of USD except for #

2024 LTM 2025 2026 2027 2028 2029
Beginning Book Value 3.95 3.71 3.71 6.1 9.12 12.26 14.64
Ending Book Value 3.71 4.45 6.1 9.12 12.26 14.64 15.29
EPS 6.11 6.43 3.71 6.1 9.12 12.25 14.63
Return on Equity 150.8% 170.8% 99.95% 99.95% 99.95% 99.95% 99.95%
Dividend per Share 0.99 1.01 1.32 3.08 5.98 9.87 13.99
Payout Ratio 16.2% 15.71% 35.53% 50.54% 65.56% 80.57% 95.58%
Retained Earnings 5.12 5.42 2.39 3.02 3.14 2.38 0.647
Equity Cost 0.381 0.359 0.359 0.59 0.881 1.18 1.41
Cost of Equity 9.66% 9.66% 9.66% 9.66% 9.66% 9.66% 9.66%
Excess Return 5.73 6.07 3.35 5.51 8.23 11.07 13.22
Discounted Excess Return
3.06 4.58 6.24 7.65 8.33

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Net Income 72,922 97,294 93,736 96,995 99,803 94,680 57,411 55,256 59,531 48,351 45,687 53,394
Total Stockholders Equity 85,844 66,796 56,950 62,146 50,672 63,090 65,339 90,488 107,147 134,047 128,249 119,355
Return on Equity 99.94% 170.8% 150.8% 191.4% 158.2% 144.9% 63.45% 51.57% 44.41% 37.7% 38.28% 47.87%
Dividends Paid to Common Shareholders 13,929 15,144 15,190 14,957 14,757 14,447 14,003 14,038 13,974 12,834 12,189 11,691
Payout Ratio 20.52% 15.71% 16.2% 15.42% 14.8% 15.26% 24.38% 25.42% 23.5% 26.51% 26.65% 21.9%
Shares Outstanding 18,219 14,994 15,344 15,744 16,216 16,701 17,352 18,471 19,822 20,869 21,883 23,014
Earnings per Share 4.23 6.43 6.11 6.16 6.15 5.67 3.31 2.99 3 2.32 2.09 2.32
Dividend per Share 0.789 1.01 0.99 0.95 0.91 0.865 0.807 0.76 0.705 0.615 0.557 0.508
Dividend Growth Rate 7.44% 2.02% 4.21% 4.4% 5.2% 7.19% 6.18% 7.8% 14.63% 10.41% 9.65% 10.2%
Book Value 4.6 4.45 3.71 3.95 3.12 3.78 3.77 4.9 5.41 6.42 5.86 5.19
discounting cash flows home logo

Discounting Cash Flows

Are you finding our services helpful? Review us on trustpilot logo Trustpilot
Have a question? Contact us