MRK — Valuation Models

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

Valuation Summary

Model	Intrinsic Value	vs Price ($121.41)
DCF	$69.86	-42.5%
Graham Number	$59.01	-51.4%
Reverse DCF	—	implied g: 13.2%
DDM	$70.04	-42.3%
EV/EBITDA	$123.84	+2.0%

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

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $11.89B

Near-term growth (yrs 1–5)(%)Rev: 5.0% / EPS: -19.3%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 5.07%

Computed WACC: 5.07%

Cost of equity (Re)5.93%(Rf 4.30% + β 0.30 × ERP 5.50%)

Cost of debt (Rd)0.00%(no debt / unavailable → 0%)

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

Equity weight (E/V)85.59%

Debt weight (D/V)14.41%

Results

Intrinsic Value / share$200.56

Current Price$121.41

Upside / Downside+65.2%

Net Debt (used)$35.97B

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

WACC \ Near-term	-3.0%	1.0%	5.0%	9.0%	13.0%
7.0%	$70.58	$87.80	$107.83	$131.01	$157.71
8.0%	$55.44	$69.29	$85.39	$103.99	$125.39
9.0%	$44.94	$56.48	$69.86	$85.31	$103.06
10.0%	$37.23	$47.08	$58.48	$71.62	$86.70
11.0%	$31.33	$39.88	$49.77	$61.16	$74.21

2 — Graham Number

Assumptions

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

EPS (trailing)($)Yahoo: $7.28

Book Value / share($)Yahoo: $21.26

Results

Graham Number$59.01

Current Price$121.41

Margin of Safety-51.4%

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

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 5.07%

Terminal growth rate(%)

Computed WACC: 5.07%

Cost of equity (Re)5.93%(Rf 4.30% + β 0.30 × ERP 5.50%)

Cost of debt (Rd)0.00%(no debt / unavailable → 0%)

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

Equity weight (E/V)85.59%

Debt weight (D/V)14.41%

Results

Current Price$121.41

Implied Near-term FCF Growth-1.8%

Historical Revenue Growth5.0%

Historical Earnings Growth-19.3%

Base FCF (TTM)$11.89B

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: $3.40

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$70.04

Current Price$121.41

Upside / Downside-42.3%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $29.11B

Target EV/EBITDA multipleCurrent: 11.8×

Net Debt($B)Default: $35.97B

Results

Implied Equity Value / share$123.84

Current Price$121.41

Upside / Downside+2.0%

Implied EV$342.16B

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

Mult \ Net Debt	$17.97B	$26.97B	$35.97B	$44.97B	$53.97B
7.8x	$84.04	$80.40	$76.76	$73.12	$69.47
9.8x	$107.58	$103.94	$100.30	$96.66	$93.02
11.8x	$131.12	$127.48	$123.84	$120.20	$116.56
13.8x	$154.67	$151.03	$147.39	$143.75	$140.11
15.8x	$178.21	$174.57	$170.93	$167.29	$163.65

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