With all components built—from revenue assumptions to UFCF forecasts—you're finally ready to calculate the company's value using the Discounted Cash Flow (DCF) method.

The DCF boils down to one concept: cash today is worth more than cash tomorrow. That's why future cash flows must be discounted using a rate that reflects risk and time. This rate is the WACC, or Weighted Average Cost of Capital.

The WACC accounts for:

• The cost of equity (what investors expect in return);
• The cost of debt (what the company pays lenders);
• The company's capital structure (equity vs. debt proportions);
• And the effect of taxes on debt interest.

Equally important is the Perpetuity Growth Rate (g), used to estimate how the business will grow beyond the explicit forecast period. It represents the long-term, stable growth rate expected after the final projection year.

To determine the value, you'll discount:

• All UFCF forecasts from 2024–2028;
• Plus a Terminal Value representing all future cash flows after 2028.

The full formula looks like this:

Where:

It's crucial that the forecasted UFCF aligns logically with your earlier assumptions. Overestimating growth or underestimating risk can distort valuation drastically.