i What this calculator does
Quick answer: Value a company from its free cash flow, growth rate and discount rate, with a terminal value and a per-share result in rand. With the default inputs (current free cash flow 3 200, growth rate, years 1-5 8), it returns value per share of R34.64.
A discounted cash flow model values a company as the present value of the cash it will produce. It is the most theoretically sound valuation method and the most sensitive to assumptions, which is the trade-off.
Three inputs decide almost everything: the growth rate, the discount rate, and the terminal growth rate. Change any one by a percentage point and the answer moves substantially, which is why a DCF is best used as a range rather than a number.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
Common results
What the calculator returns as the current free cash flow changes, with every other input at its default (growth rate, years 1-5 8, terminal growth rate 4.5, discount rate 13, net debt 4 500, shares in issue 1 180).
| Current Free Cash Flow | Value Per Share | Enterprise Value | Equity Value |
|---|---|---|---|
| 1 000 R million | R8.20 | R14 179m | R9 679m |
| 2 000 R million | R20.22 | R28 357m | R23 857m |
| 4 000 R million | R44.25 | R56 715m | R52 215m |
| 7 500 R million | R86.30 | R106 340m | R101 840m |
| 15 000 R million | R176.42 | R212 679m | R208 179m |
| 30 000 R million | R356.66 | R425 359m | R420 859m |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- Company tax: 27%. Source: Company Tax Rates Reference (verified 29 September 2026).
- Securities Transfer Tax: 0.25% on share purchases. Source: JSE Trading Cost Schedule (verified 27 September 2026).
- JSE trading hours: 09:00 to 17:00 SAST. Source: JSE Trading Hours and Holidays (verified 27 September 2026).
How the calculation works
Six inputs drive the result: Current Free Cash Flow, Growth Rate, Years 1-5, Terminal Growth Rate, Discount Rate, Net Debt and Shares in Issue. Terminal Growth Rate: Should not exceed long-run economic growth. Discount Rate: Your WACC or required return. Net Debt: Debt less cash. The project is FCF grows at 8.0% for five years. The discount is each year divided by (1 + 13.0%)^n = R13 997m. The terminal is R4 913m / (13.0% - 4.5%) = R57 805m. The equity is R45 372m - R4 500m = R40 872m. The breakdown also lists year 1 discounted, year 2 discounted, year 3 discounted and year 4 discounted.
A worked example in rand
Run it with the inputs it opens with, current free cash flow 3 200 R million, growth rate, years 1-5 8%, terminal growth rate 4.5%, discount rate 13%, net debt 4 500 R million and shares in issue 1 180 million, and the value per share comes out at R34.64, intrinsic value from these assumptions. The other figures are enterprise value R45 372m and equity value R40 872m. Now set the current free cash flow to 6 400: the value per share moves from R34.64 to R73.09, the enterprise value moves from R45 372m to R90 743m and the equity value moves from R40 872m to R86 243m.
How to read the result
For the default case the verdict is: "The terminal value is 69% of the total, which is a reasonable balance." Read it as a flag rather than advice: it tells you where the numbers sit relative to the usual rules of thumb. A single ratio is a starting question, not an answer: cheap can mean undervalued or deservedly cheap, and only the sector comparison and the earnings trend separate the two. Should I Take My Retirement Lump Sum as Cash or an Annuity? explains the thinking behind these figures.
The South African angle
Using the discounted cash flow calculator from South Africa adds a few local facts to the arithmetic. South African company tax is 27%, with dividends then taxed at 20% in the shareholder's hands, so the after-tax yield of a JSE dividend is materially below the headline figure. Dual-listed companies such as the large miners and Richemont trade on the JSE at a rand price that tracks the foreign listing, so their rand valuation ratios move with the exchange rate daily. Earnings on the JSE are reported in rand but many large companies earn most of their revenue in dollars, so a rand valuation ratio moves with the exchange rate even when the business does not. The discounted cash flow calculator draws on the same figures, which are kept on the JSE indices reference and updated as they change.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
Frequently asked questions
What discount rate should I use?
The weighted average cost of capital is the standard choice for valuing the whole firm. For a South African company that starts from the risk-free rate, which follows the long bond yield, plus an equity risk premium and the company's own risk. Anything from 11% to 16% is common here, and the rate matters more than almost any other input.
What terminal growth rate is reasonable?
It should not exceed the long-run growth of the economy, because a company growing faster than the economy forever would eventually become the economy. Something at or below expected long-run inflation plus real growth is defensible. Above that, the model is producing a number rather than an estimate.
Why is so much of the value in the terminal value?
Because five years of cash flow is a small part of a company's life. A terminal value of 60% to 75% of the total is normal. Above that, the valuation depends almost entirely on an assumption about a period nobody can forecast, which is worth knowing before acting on the result.
Should I use free cash flow or earnings?
Free cash flow, which is operating cash flow less capital expenditure. Earnings include non-cash items and exclude the capital a company must spend to keep operating. Cash is what can be returned to shareholders; earnings are an accounting view of it.
How accurate is a DCF?
It is precise and not necessarily accurate. The arithmetic is exact; the inputs are forecasts. The honest use is to run several scenarios and see what range of prices they support, then compare that range to the market price rather than treating one output as the answer.
Does this work for a bank?
Not well. Banks have no meaningful free cash flow in the usual sense because debt is part of the operating business rather than the funding. Dividend discount models or price to book are the conventional approaches for financials.
Want to embed this calculator on your site?
Embed this calculator
Free to use on your own site. Copy the code below and paste it where you want the calculator to appear.
<iframe src="https://www.tradeanswers.co.za/embed/dcf-calculator.html"
width="100%" height="750" style="border:0;max-width:520px"
title="Risk Per Trade Calculator - TradeAnswers" loading="lazy"></iframe>
<p><a href="https://www.tradeanswers.co.za/dcf-calculator.html">Discounted Cash Flow Calculator</a> by <a href="https://www.tradeanswers.co.za/">TradeAnswers</a></p>