TROW — Valuation Models

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

Valuation Summary

Model	Intrinsic Value	vs Price ($93.52)
DCF	$183.60	+96.3%
Graham Number	$101.64	+8.7%
Reverse DCF	—	implied g: -6.8%
DDM	$107.12	+14.5%
EV/EBITDA	$100.39	+7.3%

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

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $1.99B

Near-term growth (yrs 1–5)(%)Rev: 6.0% / EPS: 3.6%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 12.55%

Computed WACC: 12.55%

Cost of equity (Re)12.84%(Rf 4.30% + β 1.55 × 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)97.75%

Debt weight (D/V)2.25%

Results

Intrinsic Value / share$122.21

Current Price$93.52

Upside / Downside+30.7%

Net Debt (used)-$2.91B

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

WACC \ Near-term	-2.0%	2.0%	6.0%	10.0%	14.0%
7.0%	$186.04	$220.74	$261.06	$307.67	$361.31
8.0%	$155.01	$182.91	$215.27	$252.64	$295.59
9.0%	$133.53	$156.72	$183.60	$214.59	$250.17
10.0%	$117.77	$137.53	$160.40	$186.74	$216.94
11.0%	$105.71	$122.86	$142.68	$165.48	$191.59

2 — Graham Number

Assumptions

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

EPS (trailing)($)Yahoo: $9.24

Book Value / share($)Yahoo: $49.69

Results

Graham Number$101.64

Current Price$93.52

Margin of Safety+8.7%

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

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 12.55%

Terminal growth rate(%)

Computed WACC: 12.55%

Cost of equity (Re)12.84%(Rf 4.30% + β 1.55 × 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)97.75%

Debt weight (D/V)2.25%

Results

Current Price$93.52

Implied Near-term FCF Growth0.2%

Historical Revenue Growth6.0%

Historical Earnings Growth3.6%

Base FCF (TTM)$1.99B

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: $5.20

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$107.12

Current Price$93.52

Upside / Downside+14.5%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $2.97B

Target EV/EBITDA multipleCurrent: 6.4×

Net Debt($B)Default: -$2.91B

Results

Implied Equity Value / share$100.39

Current Price$93.52

Upside / Downside+7.3%

Implied EV$18.98B

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

Mult \ Net Debt	-$4.91B	-$3.91B	-$2.91B	-$1.91B	-$909.20M
2.4x	$55.05	$50.47	$45.88	$41.30	$36.71
4.4x	$82.31	$77.72	$73.13	$68.55	$63.96
6.4x	$109.56	$104.97	$100.39	$95.80	$91.22
8.4x	$136.81	$132.23	$127.64	$123.06	$118.47
10.4x	$164.07	$159.48	$154.89	$150.31	$145.72

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