# CRM – DCF (2026-11-10)

Sample run by the Fair Value Coordinator. Method: 5-year explicit FCF forecast + Gordon growth terminal value, cross-checked with the implied terminal FCF multiple.

## Inputs
- Risk-free (10Y UST, 2026-11-10): 4.98%; ERP 5.0%; beta (5Y observed) 1.23 -> cost of equity 11.13%
- Cost of debt: 10Y + 1.0% spread (coordinator assumption), 21% tax -> 4.72% after tax; weights at market cap $175.69B / total debt $42.38B -> **WACC 9.89%**
- Year-1 FCF = consensus FY1 FCF $15.00B (FY ending Jan 31, 2027); TTM FCF $15.15B.
- Growth path (FCF grows with revenue, constant FCF margin): years 2-3 at consensus 3Y revenue CAGR 10.3%, then fades linearly to terminal g by year 5
- Net cash (debt): $-30.97B; shares 823M (market cap / price; basic, not fully diluted)
- Scenarios: bear = 90% of year-1 FCF, half the growth rate, g 2.0%; base = as above, g 2.5%; bull = 110% of year-1 FCF, 1.25x growth, g 3.0%; all at base WACC

## Result (per share, vs close $213.48)
| Bear | Base | Bull |
|---|---|---|
| $187.33 | **$261.52** | $333.75 |

Base-case year 1-5 FCF ($B): 15.0, 16.5, 18.2, 19.6, 20.6. Terminal value is 73% of EV; implied terminal multiple 13.9x year-5 FCF (exit-multiple cross-check).

## Sensitivity (base case, $/share)
| WACC \ g | 2.0% | 2.5% | 3.0% |
|---|---|---|---|
| 8.89% | $288.01 | $309.55 | $334.74 |
| 9.89% | $245.70 | $261.52 | $279.63 |
| 10.89% | $212.93 | $224.97 | $238.53 |

Sources: see data/2026-11-10/CRM.md