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Author: atta9508 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1671  
Subject: Re: Discount conundrum Date: 6/7/2011 11:46 AM
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I am new to DCF and probably can't add much, but I tend to use a similar approach Jack.

For Game Stop Here is what I estimate.

Cost of Debt: 7.3 (based on lont term bond rate plus an adder for the companies cost of borrowing based on bond rating

Cost of Equity: 11.3%

For the cost of equity I use the risk free rate + market rate. I adjust this with a Beta (bottoms up) based on debt/equity relative to other companys versus a global index fund (taken from Damdoran).

WACC: 9.5%

Can either of you point me in a direction to where I can compare my valuations to others. As I said I am new to this and still feeling out reasonable assumptions, and my approach. I have looked at wikiwealth, but not sure if I agree with everything they do. I am hoping to find a work group where people can post either outputs, inputs compare with others.


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