Editing EasyJet plc (section)

=== What are the assumptions used to estimate the return? ===

==== Key Inputs ====
{| class="wikitable"
!Description
!Value
!Commentary
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|Valuation Model
|Discounted Cash Flow and Comparable Company Analysis
|Two main approaches can be used to estimate the value of an investment:

# One form of intrinsic valuation is the discounted cash flow model where future cash flows are discounted to the present value.
# Comparing key financial metrics of the company to other similar investment

Research has suggested that to estimate the expected return of an investment over a long-term investment horizon, a discounted cash flow model provides an accurate projection. For completeness a comparable company analysis has been conducted, however the accuracy of the analysis is limited due to the fact that the effects of the COVID-19 pandemic may have affected different airlines to varying extents, thus vastly diverging their share price and debt.
|-
|Financial Projections
|Stockhub, CapitalIQ, Yahoo Finance
|To improve the reliability of financial projections, a mixture of sources was used when projecting key financial metrics such as revenue.
|-
|Discount Rate
|WACC
|The weighted average cost of capital was used as the discount rate as it expresses the return that both bondholders and shareholders demand to provide the company with capital. The cost of equity and cost of debt have been calculated in the tables provided below using values taken from the company's financial statements, beta for the stock, and expected market returns.
|}