RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:NoShort - The Bottomless fool, The Tree Planter....I disagree with your analysis that you can discount debt but not also account for equity. Normally the "discount rate" of a cash flow analysis involves accounting for the cost of interest and also potentially an accounting of the ratio of debt AND assets. So merely subtracting all of their debt after the Ebitda muliple is not a general practice of the DCF analysis but is something you are doing to cook the numbers down.. and when you take all of your improper steps you still get a number pretty close to where we are now. So even the most bearish analysis (that is also incorrect in my estimation) still suggests we in BUY territory.
this quote details the mistake you are using by subtracting debt instead of the COST of debt followed by a discount that accounts for debt VERSUS assets
The Discount Rate is usually determined as a function of prevailing market (or known) required rates of return for Debt and Equity, as well as the split between outstanding Debt and Equity in the company’s capital structure. These required rates of return (or discount rates or “costs of capital”) are generally then blended into a single discount rate for the Free Cash Flows of the company as a whole—this is known as the Weighted Average Cost of Capital (WACC). We will discuss WACC calculations in detail later in this chapter