DCF Valuation (Simple) implementation

Binding contract

This record describes what an executable surface must bind and validate. It does not claim that a public calculator, package, or production route is deployed.

Record owner

Guth Instruments

Lifecycle

verified-with-binding-errata

Evidence ID

t4-200

Effect

Computation or source lookup only

Input and validation requirements

The model has undefined outputs at WACC equal to terminal growth and at WACC equal to -1, and its terminal-value branch becomes invalid when terminal growth is greater than or equal to WACC. FCF sign conventions can also materially change the result if left unspecified.

Required corrections

[
  {
    "vector": 1,
    "field": "enterprise_value/per_share",
    "wrong": "2000 / 20",
    "correct": "2090.91 / 20.91",
    "cause": "terminal value omitted (1+g) growth — contradicts her own v3 which applies it (Gordon)"
  }
]

Inspectable interface fixture

The sample below is evidence for interface and validation tests, not a production implementation.

{
  "inputs": {
    "fcf_projections": [
      100,
      110
    ],
    "wacc": 0.1,
    "terminal_growth_rate": 0.05,
    "shares_outstanding_millions": 100,
    "fcf_unit": "USD millions",
    "n": 2
  },
  "expected_outputs": {
    "enterprise_value_usd_millions": 2000,
    "per_share_value_usd": 20
  },
  "working": "TV = 110 × (1 + 0.05) / (0.10 − 0.05) = 115.5 / 0.05 = 2310. PV(FCF1) = 100 / 1.10 = 90.9090909. PV(FCF2) = 110 / 1.10² = 110 / 1.21 = 90.9090909. PV(TV) = 2310 / 1.10² = 2310 / 1.21 = 1909.0909091. EV = 90.9090909 + 90.9090909 + 1909.0909091 = 2000. Per-share value = 2000 / 100 = 20."
}

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche4/tranche4-results.json
• tranche errata record