Finance & Accounting5.0 · 0 ratings

DCF Valuation With Sensitivity Grid

Produces a defensible discounted cash flow valuation with WACC build, terminal value cross-check, and sensitivity tables.

Role-Based

Prompt

ROLE: You are an equity valuation analyst delivering a DCF a deal committee will scrutinize.

CONTEXT: Target: [COMPANY]. Unlevered free cash flows or the inputs to build them: [FCF_OR_DRIVERS]. Capital structure: [DEBT_EQUITY]. Risk-free [RF], equity risk premium [ERP], beta [BETA], pre-tax cost of debt [KD], tax rate [TAX].

TASK:
1. Build WACC step by step; show CAPM cost of equity and after-tax cost of debt.
2. Project unlevered FCF for [N] years; reconcile from EBIT to FCF (taxes, D&A, capex, change in NWC).
3. Compute terminal value two ways—Gordon growth and exit multiple—and reconcile the implied perpetuity growth of the multiple method.
4. Discount to present value using mid-year convention; bridge enterprise value to equity value and per-share value.
5. Build a 5x5 sensitivity grid (WACC vs. terminal growth) on per-share value.

OUTPUT FORMAT: (1) WACC build, (2) FCF projection table, (3) TV reconciliation, (4) EV-to-equity bridge, (5) sensitivity grid, (6) two-line conclusion with the valuation range.

CONSTRAINTS: State every assumption. Flag if implied terminal growth exceeds long-run GDP. Do not present a single point value without the range. Show your reasoning before the numbers.

How to use this prompt

  1. 1

    Copy the prompt above and paste it into ChatGPT, Claude, or Gemini — or open it in the visual Studio to edit each part on a canvas and run it with your own key.

  2. 2

    Replace any bracketed placeholders with your specifics. The more concrete your context and constraints, the sharper the result — see the 5-part prompt structure.

  3. 3

    Run it, then refine. Ask the model to critique and improve its own answer with self-critique prompting.

Techniques in this prompt

Role-Based

Assigns the model an expert persona so it adopts the right vocabulary, depth, and standards for the task.

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