Why isn’t Damodaran DCF the headline valuation?

Screening at scale needs one explainable market-median headline. That comes from the multiples engine (EV/EBITDA → P/E → EV/Revenue after one source is chosen). DCF is the intrinsic cross-check on its own tab with a delta card — useful when cash-flow assumptions matter, not a second silent mid. Full method: misano.ai/guides/how-we-value-companies-at-scale.

What does FCFF at WACC mean here?

Misano discounts free cash flow to firm at WACC, not equity cash flows at Ke. FCFF = NOPAT + D&A − Capex − ΔNWC. WACC uses CAPM equity cost plus after-tax debt cost and capital-structure weights. Detail: misano.ai/guides/how-to-value-a-private-company.

Why is terminal growth capped at Rf?

Gordon terminal value grows forever. A perpetual g above the risk-free rate is economically unstable and inflates TV. Misano hard-caps g ≤ Rf (default terminal g 2.5%, below Rf) so the terminal cannot explode the enterprise value.

How does DCF relate to the football field?

DCF is one bar on the football field alongside multiples methods and NAV. Misano does not blend those bars into one fake-precise CZK; the mid from multiples stays the headline while DCF and NAV triangulate. See misano.ai/guides/value-band-is-triangulated.

Damodaran DCF is a cross-check, not the headline.

The multiples engine sets Misano’s headline fair market value. A Damodaran-style DCF answers a different question: what are these cash flows worth as an intrinsic check. In the UI it lives on its own tab with a delta card against the multiples valuation. The math is deterministic — AI extracts filings; it does not invent the discount rate.

Construction: FCFF at WACC

Free cash flow to firm (FCFF), discounted at WACC — not FCFE discounted at Ke.
FCFF = NOPAT + D&A − Capex − ΔNWC, with NOPAT = EBIT × (1 − t) and EBIT = EBITDA − D&A.
WACC via CAPM: Ke = Rf + β·ERP + size premium + CRP; Kd after tax; weights D/(D+E).
Terminal value uses Gordon growth with a hard cap g ≤ Rf — growth above the risk-free rate is not a sustainable perpetual, and the cap stops the terminal value from exploding.

Provenance and defaults

Every assumption carries a provenance label (source + vintage). When a source cannot be documented, the label says “[source unknown]” — overrides stay manual and explicit.
Defaults in the engine today: Rf 4.77% (CNB 10Y government bond, 2026-Q1); ERP 5.25% (Damodaran mature-market ERP, Jan 2026); CRP (CZ) ~0.5 pp (Damodaran Jan 2026); β unlevered per industry (Damodaran Europe); size premium 3.0% when revenue < 100M, else 1.5%; Kd pre-tax 6.0%; D/(D+E) 10%; tax 21%; terminal g 2.5% (below Rf).
Damodaran industry seed vintage Jan 2026: ~35 European industry groups plus 17 global as fallback (unlevered beta, total beta, margins, capex/sales, NWC/sales). Aggregate use is permitted; Misano does not republish the full datasets.
NACE → Damodaran mapping covers ~80 divisions, each with confidence high / medium / low — low is flagged for manual review.

Sanity checks

TV as a share of EV above 85% → warning (too much value parked in the terminal = heroic assumptions).
Implied exit multiple = TV / terminal EBITDA, checked against the multiples table.
In the terminal year, capex should sit near D&A (± 20%).
A sensitivity matrix of EV across WACC × g sits beside the point estimate so one cell cannot look more precise than it is.

What this is not

Not the headline. Multiples mid remains the fair-market headline for a financial buyer.
Not a silent average of multiples, DCF, and NAV into one CZK. Triangulation stays visible: misano.ai/guides/value-band-is-triangulated.
Not a strategic premium or auction top: misano.ai/guides/fair-market-value-for-a-financial-buyer.
Not a rewrite of the full valuation essay. Multiples cascade, normalization, staleness, NAV, DCF, and football field stay at misano.ai/guides/how-we-value-companies-at-scale and misano.ai/guides/how-to-value-a-private-company.

Get started at https://app.misano.ai/login. From €39/month billed annually, 14-day money-back, no sales call. Product path: misano.ai/scout.

See also: misano.ai/guides/how-we-value-companies-at-scale, misano.ai/guides/how-to-value-a-private-company, misano.ai/guides/value-band-is-triangulated, and misano.ai/guides/nav-reconciles-the-income-value.