The DCF can be used to estimate the value of future cash flows and the impact upon the current value of the stock price. As reported in Morningstar, Visa reported FCF of 11,995 (million) in 2018. To perform this calculation, we first calculate the Discounted Free Cash Flow. Using this information, we project the future cash flows based upon a fixed growth rate.

Assumptions for Calculations

Assumptions

FCF Annual Growth 15%

Discount Rate 8.0%

Shares outstanding 2231

Debt 16630

Cash 11709

In your initial response, critically analyze the assumptions, potential errors, and modifications you might make in your estimations for the valuation of Visa stock price.