AIG — Valuation Models

Interactive models with editable assumptions. All calculations run client-side.

Valuation Summary

Model	Intrinsic Value	vs Price ($79.17)
DCF	$372.68	+370.7%
Graham Number	$96.64	+22.1%
Reverse DCF	—	implied g: -20.0%
DDM	$37.08	-53.2%
EV/EBITDA	$81.17	+2.5%

Values reflect default assumptions. Adjust inputs in each model below to update.

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $11.26B

Near-term growth (yrs 1–5)(%)Rev: -7.2% / EPS: -5.6%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 6.72%

Computed WACC: 6.72%

Cost of equity (Re)7.49%(Rf 4.30% + β 0.58 × ERP 5.50%)

Cost of debt (Rd)4.37%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)80.96%

Debt weight (D/V)19.04%

Results

Intrinsic Value / share$574.13

Current Price$79.17

Upside / Downside+625.2%

Net Debt (used)-$2.31B

Sensitivity: WACC (rows) × Near-term g (cols)

WACC \ Near-term	-3.0%	1.0%	5.0%	9.0%	13.0%
7.0%	$375.84	$450.97	$538.38	$639.54	$756.06
8.0%	$309.73	$370.20	$440.45	$521.64	$615.05
9.0%	$263.92	$314.27	$372.68	$440.09	$517.56
10.0%	$230.29	$273.25	$323.00	$380.35	$446.17
11.0%	$204.54	$241.86	$285.03	$334.72	$391.68

2 — Graham Number

Assumptions

MultiplierGraham used 22.5 (15× P/E × 1.5× P/B)

EPS (trailing)($)Yahoo: $5.43

Book Value / share($)Yahoo: $76.44

Results

Graham Number$96.64

Current Price$79.17

Margin of Safety+22.1%

Formula: √(22.5 × max(0,EPS) × max(0,BVPS))

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 6.72%

Terminal growth rate(%)

Computed WACC: 6.72%

Cost of equity (Re)7.49%(Rf 4.30% + β 0.58 × ERP 5.50%)

Cost of debt (Rd)4.37%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)80.96%

Debt weight (D/V)19.04%

Results

Current Price$79.17

Implied Near-term FCF Growth-20.0%

Historical Revenue Growth-7.2%

Historical Earnings Growth-5.6%

Base FCF (TTM)$11.26B

Implied growth is the FCF growth rate (yrs 1–5) that makes the DCF intrinsic value equal the current price. Long-term growth is set to half the implied near-term rate.

4 — Dividend Discount Model (DDM)

Assumptions

Annual dividend D0($/share)Yahoo: $1.80

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$37.08

Current Price$79.17

Upside / Downside-53.2%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $7.92B

Target EV/EBITDA multipleCurrent: 5.2×

Net Debt($B)Default: -$2.31B

Results

Implied Equity Value / share$81.17

Current Price$79.17

Upside / Downside+2.5%

Implied EV$41.24B

Sensitivity: EV/EBITDA multiple (rows) × Net Debt (cols)

Mult \ Net Debt	-$4.31B	-$3.31B	-$2.31B	-$1.31B	-$313.00M
1.2x	$25.85	$23.99	$22.13	$20.26	$18.40
3.2x	$55.38	$53.51	$51.65	$49.78	$47.92
5.2x	$84.90	$83.03	$81.17	$79.31	$77.44
7.2x	$114.42	$112.55	$110.69	$108.83	$106.96
9.2x	$143.94	$142.08	$140.21	$138.35	$136.49

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