McDonald's Corporation (MCD) DCF Valuation
McDonald's DCF: $8.5B TTM FCF, dividend king, 4% growth on digital + intl.
Consumer Discretionary · Founded 1955 (predecessor) · Beta 0.65
McDonald's Corporation
Current price: $296.40 · Market cap ≈ $213.4B
McDonald's $8.5B TTM FCF is supported by the digital transformation (drive-thru, mobile ordering, loyalty program) and international growth (China, Japan, Australia recovery). The $38B net debt is moderate. Dividend king. Long-term thesis depends on same-store-sales recovery as traffic normalizes, digital ordering driving margin expansion, and international expansion (China + emerging markets). Beta of 0.65 reflects defensive consumer nature. Buybacks + dividend return >75% of FCF. Operating margin ~45% is best-in-class for QSR.
DCF Valuation Inputs
High-growth phase
Decay/growth normalization
Perpetual (≤ WACC)
Must be > terminal growth
in millions
Enterprise Value
$169M
Equity Value
$131M
Per Share
$0
Upside / (Downside)
-100.0%
PV of explicit FCF
$38M
Terminal value
$193M
PV of terminal
$131M
Terminal % of EV
77.5%
| Year | Growth | FCF ($M) | Discount Factor | PV ($M) |
|---|---|---|---|---|
| 0 | base | $9 | 1.000 | — |
| 1 | 4.0% | $9 | 0.926 | $8 |
| 2 | 4.0% | $9 | 0.857 | $8 |
| 3 | 4.0% | $10 | 0.794 | $8 |
| 4 | 4.0% | $10 | 0.735 | $7 |
| 5 | 4.0% | $10 | 0.681 | $7 |
| Terminal | perpetual | — | — | $131 |
Discount factor = 1 / (1 + WACC)ⁿ. Terminal value computed using the Gordon Growth Model: TV = FCF_N × (1 + g) / (WACC − g), then discounted back to present.
| g ＼ WACC | 6.0% | 7.0% | 8.0% | 9.0% | 10.0% |
|---|---|---|---|---|---|
| 1.5% | $0 | $0 | $0 | $0 | $0 |
| 2.0% | $0 | $0 | $0 | $0 | $0 |
| 2.5% | $0 | $0 | $0 | $0 | $0 |
| 3.0% | $0 | $0 | $0 | $0 | $0 |
| 3.5% | $0 | $0 | $0 | $0 | $0 |
Highlighted cell is your current WACC × terminal-growth assumption. Cells beyond WACC ≤ g are undefined (Gordon Growth fails).
MCD DCF: At Default Assumptions
| Item | Value | Notes |
|---|---|---|
| Current price | $296.40 | Market |
| Intrinsic value (per share) | $0.18 | DCF model output |
| Upside / (Downside) | -99.9% | vs current price |
| Enterprise value | $$169M | PV of explicit FCF + terminal |
| Equity value | $$131M | EV − net debt |
| Key fact | Dividend king: 45+ consecutive years | |
Numbers reflect TTM fundamentals + default DCF assumptions (8.0% WACC, 2.5% terminal growth, 4% Year-1 growth, 4% Years 2+). Use the calculator above to run your own scenario.
MCD Sources & References
- SEC EDGAR: latest 10-K filing, 10-Q filings, and proxy statement for McDonald's Corporation (MCD). sec.gov
- Yahoo Finance: real-time price snapshot, analyst consensus growth estimates, and 52-week range.
- S&P Capital IQ: WACC build (cost of equity via CAPM + after-tax cost of debt).
- Federal Reserve Economic Data (FRED): risk-free rate for CAPM, sector beta benchmarks. fred.stlouisfed.org
- Damodaran Online (NYU): Consumer Discretionary sector WACC and beta benchmarks for cross-validation. pages.stern.nyu.edu
Related MCD valuation searches
These are common MCD valuation questions answered by the DCF model above.
MCD sector peers & related DCF models
24 cross-links below: same-sector tickers shown first for topical authority, then a broader sample across all 112 covered assets.
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Author
Maya Chen, CFA
Chartered Financial Analyst
Independently reviewed
Dr. Aaron Pak, PhD
Doctor of Kinesiology & Public Health
Last reviewed: August 12, 2026 · Next scheduled review: quarterly
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Cross-checked against authoritative formulas (IRS, NIST, ACSM) and updated for 2025/2026 tax years and rates.
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