ARCC — Valuation Models

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

Valuation Summary

Model	Intrinsic Value	vs Price ($18.62)
DCF	$-4.47	-124.0%
Graham Number	$28.89	+55.2%
Reverse DCF	—	implied g: 19.9%
DDM	$39.55	+112.4%
EV/EBITDA	—	—

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

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $689.25M

Near-term growth (yrs 1–5)(%)Rev: 4.5% / EPS: -24.9%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 5.81%

Computed WACC: 5.81%

Cost of equity (Re)7.71%(Rf 4.30% + β 0.62 × ERP 5.50%)

Cost of debt (Rd)5.34%(interest expense ÷ avg debt (SEC))

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

Equity weight (E/V)45.49%

Debt weight (D/V)54.51%

Results

Intrinsic Value / share$11.98

Current Price$18.62

Upside / Downside-35.7%

Net Debt (used)$15.31B

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

WACC \ Near-term	-3.0%	1.0%	5.0%	9.0%	13.0%
7.0%	$-4.32	$-0.88	$3.11	$7.74	$13.07
8.0%	$-7.35	$-4.58	$-1.37	$2.35	$6.62
9.0%	$-9.44	$-7.14	$-4.47	$-1.38	$2.16
10.0%	$-10.98	$-9.02	$-6.74	$-4.12	$-1.10
11.0%	$-12.16	$-10.45	$-8.48	$-6.20	$-3.60

2 — Graham Number

Assumptions

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

EPS (trailing)($)Yahoo: $1.86

Book Value / share($)Yahoo: $19.94

Results

Graham Number$28.89

Current Price$18.62

Margin of Safety+55.2%

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

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 5.81%

Terminal growth rate(%)

Computed WACC: 5.81%

Cost of equity (Re)7.71%(Rf 4.30% + β 0.62 × ERP 5.50%)

Cost of debt (Rd)5.34%(interest expense ÷ avg debt (SEC))

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

Equity weight (E/V)45.49%

Debt weight (D/V)54.51%

Results

Current Price$18.62

Implied Near-term FCF Growth7.8%

Historical Revenue Growth4.5%

Historical Earnings Growth-24.9%

Base FCF (TTM)$689.25M

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: $1.92

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$39.55

Current Price$18.62

Upside / Downside+112.4%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: —

Target EV/EBITDA multipleCurrent: —×

Net Debt($B)Default: $15.31B

Results

Implied Equity Value / share$-21.32

Current Price$18.62

Upside / Downside-214.5%

Implied EV$0

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