Bank of America Corporation (BAC) Discounted Free Cash Flow - Perpetuity - Discounting Cash Flows
BAC
Bank of America Corporation
BAC (NYSE)

Estimated Value

USD

Market Price USD

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

Discounted Free Cash Flow Model

Discounted Free Cash Flow calculates the value of a share based on the company's estimated future Free Cash Flow figures.

See our GitHub Model Documentation

Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate = Equity Weight * Cost of Equity + Debt Weight * Cost of Debt * (1 - Tax Rate)

Calculated using Weighted Average Cost of Capital (WACC) formula. It represents a firm’s average after-tax cost of capital from all sources, including common stock, preferred stock, bonds, and other forms of debt.

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Cost of Equity

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.

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Cost of Debt

Cost of Debt = Interest Expense / Total Debt

The cost of debt is the effective rate that a company pays on its debt, such as bonds and loans.

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Equity & Debt Weights

Debt Weight = Total Debt / (Market Capitalization + Total Debt) = 1 - Equity Weight

The Equity Weight represents the proportion of equity-based financing (Market Capitalization), while the Debt Weight represents the proportion of debt-based financing (Total Debt).


Tax Rate

Tax Rate = Income Tax Expense / Income Before Tax

The overall tax rate paid by the company on its earned income.

↳ Beta

Beta

Beta measures the volatility of a stock's price in relation to the overall stock market. A higher beta indicates greater price fluctuations relative to the market.

↳ Risk Free Rate

Risk-Free Rate

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

↳ Market Premium

Market Premium

The market risk premium represents the additional return over the risk-free rate that investors expect for taking on the risks associated with equities.

Growth In Perpetuity

Growth in Perpetuity

The rate at which the company's free cash flow is assumed to grow indefinitely. By default, this rate equals the yield of the U.S. 10-Year Treasury Bond.

Historical Years

Historical Years

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

Projection Years

Projection Years

The number of years into the future for which the analysis projects financial performance and metrics.

Revenue Growth Rate

Revenue Growth Rate

The annual growth rate applied to projected revenue, starting from the second projection year onward.

Operating Cash Flow Margin

Operating Cash Flow Margin

Projected Operating Cash Flow = Projected Revenue * Operating Cash Flow Margin

This margin represents the percentage of revenue used to estimate future Operating Cash Flow.

Capital Expenditure Margin

Capital Expenditure Margin

Projected Free Cash Flow = Projected Operating Cash Flow - Projected Revenue * Capital Expenditure Margin

This margin is used to estimate future capital expenditures as a percentage of revenue, which in turn is subtracted from Operating Cash Flow to calculate Free Cash Flow.

Results

Terminal Value 654.9 Bil. USD
Discounted Terminal Value 390.7 Bil. USD
Sum of Discounted Free Cash Flow 135.7 Bil. USD
Enterprise Value 526.5 Bil. USD
Cash and Equivalents 280.9 Bil. USD
Total Debt 721.7 Bil. USD
Equity Value 461.9 Bil. USD
Shares Outstanding 7.68 Bil. USD
Estimated Value per Share 60.16 USD
Yield of the U.S. 10 Year Treasury Note 4.43%
Average Cash from Operating Activities Margin 18.23%
Average Capital Expenditure Margin
Cost of Equity 10.09%
Equity Weight 33.21%
Cost of Debt 12.18%
Debt Weight 66.79%
Tax Rate 7.49%

Monetary values are in USD

Edit Chart Values 2025 2026 2027 2028 2029

amounts of USD except for #

2024 2025 2026 2027 2028 2029
Revenue 192,434 165,979 178,471 191,903 206,345 221,875
Revenue Growth Rate 11.94% -13.75% 7.53% 7.53% 7.53% 7.53%
Operating Cash Flow -8,805 30,258 32,535 34,984 37,617 40,448
Operating Cash Flow Margin -4.58% 18.23% 18.23% 18.23% 18.23% 18.23%
Capital Expenditure 0 0 0 0 0 0
Capital Expenditure Margin 0% 0% 0% 0% 0% 0%
Free Cash Flow -8,805 30,258 32,535 34,984 37,617 40,448
Free Cash Flow Margin -4.58% 18.23% 18.23% 18.23% 18.23% 18.23%
Compounded Discount Rate
4.93% 16.34% 29% 43.08% 58.64%
Discounted Free Cash Flow -8,805 28,837 27,965 27,119 26,291 25,496

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Revenue 124,383 191,352 192,434 171,912 115,053 93,851 93,753 113,589 109,627 99,466 93,662 93,514
Revenue Growth Rate 7.53% -0.562% 11.94% 49.42% 22.59% 0.105% -17.46% 3.61% 10.22% 6.2% 0.158% -3.42%
Cost of Revenue 36,469 93,899 96,368 77,725 22,646 144 19,545 25,935 21,889 15,736 13,558 13,710
Gross Profit 87,914 97,453 96,066 94,187 92,407 93,707 74,208 87,654 87,738 83,730 80,104 79,804
Gross Margin 75.2% 50.93% 49.92% 54.79% 80.32% 99.85% 79.15% 77.17% 80.03% 84.18% 85.52% 85.34%
Operating Income 28,673 30,108 29,254 28,342 30,969 33,976 18,995 32,754 34,584 29,213 25,021 22,187
Operating Margin 24.64% 15.73% 15.2% 16.49% 26.92% 36.2% 20.26% 28.84% 31.55% 29.37% 26.71% 23.73%
Net Income 24,222 27,854 27,132 26,515 27,528 31,978 17,894 27,430 28,147 18,232 17,822 15,910
Net Margin 20.49% 14.56% 14.1% 15.42% 23.93% 34.07% 19.09% 24.15% 25.68% 18.33% 19.03% 17.01%
Cash from Operating Activities 20,185 4,550 -8,805 44,982 -6,327 -7,193 37,993 61,777 39,520 9,864 17,277 28,397
Cash from Operating Activities Margin 18.23% 2.38% -4.58% 26.17% -5.5% -7.66% 40.52% 54.39% 36.05% 9.92% 18.45% 30.37%
Capital Expenditure
0 0 0 0 0 0 0 0 0 0 0
Free Cash Flow 20,185 4,550 -8,805 44,982 -6,327 -7,193 37,993 61,777 39,520 9,864 17,277 28,397
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Discounting Cash Flows

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