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This model simulates the Internal Rate of Return (IRR) of a company to long-term shareholders, where the excess cash and all future earnings are assumed to be paid out as dividends.

This model does NOT simulate future share-prices. Instead the simulated earnings for the final year are assumed to grow forever so they are used to calculate Terminal Values. If you want to simulate future share-prices, then you should use another model instead.

The IRR is the discount rate that makes the Present Value equal to the current share-price. The IRR models are somewhat finicky with regard to the user-input and cannot always find the IRR.

• Sim
• Sim Vary
• Dist 1
• Dist 2

• This plot shows the simulated Internal Rate of Return (IRR), when the current share-price is .

• This plot shows how different share-prices would impact the Internal Rate of Return (IRR).
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The x-axis shows a range of prices around the current share-price of , which is marked as a dashed blue line.
The red box at the bottom shows the probability of loss if the current share-price is .

This plot shows the probability distributions for individual simulation years.

These plots show probability distributions for the simulations.