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Discounted cash flow
Result
Fair multipleCurrent setup
You are solving for Fair multiple. The business runs 2 growth stages (18.0% for 5y, then 5.0% for 20y) for a 25-year life; the economy holds across 1 discount stage (10.0% for 25y) for 25 years. The model values the first 25 years. The implied fair multiple is 24.27x.
Inputs
The output multiple, such as EV/NOPAT or P/E.
Each stage's rate and how long it lasts. The sum is the business's lifespan.
Required return per regime and how long it holds. The sum is how far we trust the economy.
Cash flow starts at 1.0 today and compounds through your growth stages in order. After the last stage the business ends — there is no perpetuity. The total of the growth years is the business's lifespan.
Each discount stage is a macro regime: a required return that holds for some years. The total discount years is how long the economy/currency is trusted.
Hard cap: the model only values min(business life, economy horizon) years. If the business outlives the economy, its later cash flows aren't valued; if it dies first, the extra economy years are moot. The sum of all discounted bars is the implied fair multiple.