Publication number: ELQ-62798-1
View all versions & Certificate
Free Cash Flow to Equity (FCFE) Stable Growth Model
Value the equity in a stable firm on the basis of free cashflows to equity
Prof. Aswath Damodaran offers you this Best Practice for free!
download for free
Add to bookmarks
Current Earnings per share
-(1- Desired debt fraction) *
(Capital Spending - Depreciation)
-(1- Desired debt fraction) *
∂ Working Capital
Free Cashflow to Equity
Cost of Equity
Expected Growth rate
Gordon Growth Model Value
Assumptions in the model:
1. The firm is in steady state and will grow at a stable rate forever.
2. The firm does not pay out what it can afford to in dividends, i.e., Dividends ≠ FCFE.
- Especially use when free cashflows to equity are different from dividends paid.
- Best suited for firms in stable leverage and growing at the same rate as the economy.
Write a review
People using this Best Practice also downloaded
Value of Control in a Firm - Excel ModelThis Excel model analyzes the value of control in a firm.1,536add_shopping_cart
Merger Synergy Valuation Excel ModelThis Excel Model estimates the value of synergy in a merger.3,140add_shopping_cart
Merger & LBO Model Valuation ExcelThis LBO model in excel analyzes the value of equity and the firm in a leveraged buyout operation.10,301add_shopping_cart
Free Cash Flow for the Firm (FCFF) Valuation Excel ModelAn Excel Model to value firms with operating income that is either positive or can be normalized to be positive.2,110add_shopping_cart
Discounted Cash Flow (DCF) Excel ModelThis DCF Excel Model provides a rough guide to which discounted cash flow model may be best suited to your firm.1,911add_shopping_cart
Dividend Discount ModelA complete dividend discount model that can do stable growth, 2-stage or 3-stage valuation.3,598add_shopping_cart
FCFF (Free Cash Flow for the Firm) Excel Model with exposure to country riskAn Excel FCFF Model allowing the user to enter a measure of company exposure to country risk when making a valuation702add_shopping_cart
FCFE (Free Cash Flow to Equity) Valuation ModelA complete FCFE valuation model that allows you to capital R&D and deal with options in the context of a valuation model2,171add_shopping_cart
High Growth Firms Valuation ModelValue tough-to-value firms, with negative earnings, high growth in revenues and few comparables601add_shopping_cart
Simple FCFF Model (Free Cash Flow for the Firm)A complete FCFF model that allows for changing margins and has default assumptions built in498add_shopping_cart
Valuation of PremiumsA model to value the premium you should pay for growth in either an intrinsic valuation or a relative valuation.284add_shopping_cart
Black-Scholes converted for Binomial TreeConverts the standard deviation input in the Black-Scholes model to up and down movements in the binomial tree.3,591add_shopping_cart
Any questions on Free Cash Flow To Equity (FCFE) Stable Growth Model?
The user community and author are here to help. Go ahead!