DCF Valuation: Key Assumptions and Methodology for Risk Assessment and Growth Projection

DCF valuation Main assumptions:

DCF valuation Main assumptions:

1) Risk-free rate of 5.75% over the detailed forecast period, based on 10- year bonds, and 5.0% on TV

2) Market premium of 6.5% (according to our methodology for smaller sWIG80 companies);

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3) Unleveraged beta of 1.0x, residual growth rate of 2.5%, 2.5p below TV's risk-free rate;

4) Incentive scheme included in DCF flows in line with approach (A. Damodaran).

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The Warsaw Stock Exchange's (GPW's) Analytical Coverage Support Programme 3.0 supports investment firms in drafting analytical reports which are financed by GPW. The objective of the Programme is to improve the availability of research covering less liquid companies, facilitating investors' informed investment decisions based on a reliable independent source of issuer information. Eligible to participate in the Programme are companies listed on the GPW Main Market (other than WIG20 participants) and on NewConnect. The Programme covers up to 50 issuers.

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assumptions risk-free rate DCF valuation beta market premium residual growth rate TV incentive scheme DCF flows Damodaran approach.

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DCF valuation Main assumptions:

GPW’s Analytical Coverage Support Programme 3.0

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