Neuberger Municipal Fund Inc. NBH AMEX

American Stock Excha • Financial Services • Asset Management • US • USD

The estimated intrinsic value of Neuberger Municipal Fund Inc. (NBH) using a 20-year Discounted Cash Flow (DCF) model is $37.79 (based on the recommended Net Income method), compared to the current stock price of $10.16. This suggests the stock may be undervalued by 271.9% relative to its intrinsic value.

The model uses a growth rate of 8% for years 1-5, 7.36% for years 6-10, and 4% as the terminal rate, with a discount rate of 4.82% (CAPM-derived from beta of 0.72). Intrinsic values across all methods: Net Income (NI): $37.79.

DCF-20 Year

NBH

Intrinsic Value Calculator — Neuberger Municipal Fund Inc.

USD 10.16 ▼ 0.10%

Recommended: Operating Cash Flow is inconsistent across recent years, making it an unreliable base for discounting. Revenue and Net Income are stable, so Net Income — which captures the underlying accounting profitability — is a more dependable foundation. Recommend to Use: Discounted Net Income.

Operating Cash Flow (M) TTM

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Total Debt (M) Deduct from IV

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Cash & Investments (M) Add to IV

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Discount Rate (%)

r = RFR + β × MRP = 2.43% + 0.723 × 3.31% = 4.82%

RFR 2.43% Risk-Free Rate (government bond yield) · US market

MRP 3.31% Market Risk Premium (expected excess return over RFR)

β 0.723 Beta: stock volatility relative to market (5-year monthly regression vs S&P 500)

Shares Outstanding (M)

Growth Rate

Year 1–5 (%)

Year 6–10 (%)

Year 11–20 (%)

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Intrinsic value
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Intrinsic Price

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Stock Price

USD 10.16

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20-Year DCF Breakdown

Year	Projected CF (M)	Discount Factor	Present Value (M)

Discounted Cash Flow over 20 years using Operating Cash Flow as the base metric, projected across three growth phases and discounted to present value.

High Growth Phase — Years 1–5

The company is assumed to be in its strongest growth period. Cash flows are projected at the highest rate g₁, reflecting rapid expansion, market share gains, or strong earnings momentum over the next 5 years.

Transition Phase — Years 6–10

Growth begins to moderate as the business matures and competition intensifies. Cash flows in years 6–10 are projected at a lower rate g₂, bridging the gap between early explosive growth and long-term stability.

Terminal Phase — Years 11–20

The company is assumed to be fully mature, growing in line with the broader economy. The terminal growth rate g₃ (typically 3–4%, close to long-run GDP growth) is applied to years 11–20, representing sustainable perpetual growth.

IV Intrinsic Value per share — the estimated true worth of one share based on discounted future cash flows over 20 years

OCF₀ Operating Cash Flow — cash generated from core business operations, including D&A, before capital expenditures

g₁ High growth rate (Yr 1–5) — auto-calculated from 3-year historical CAGR of cash flows; adjust based on your outlook

g₂ Transition growth rate (Yr 6–10) — typically 60% of g₁, reflecting slowing momentum as the business matures

g₃ Terminal growth rate (Yr 11–20) — long-run sustainable growth, typically 3–4% matching nominal GDP growth

r Discount rate — converts future cash to today's value; auto-calculated via CAPM = Risk-Free Rate + β × Equity Risk Premium

D Total Debt — sum of short-term and long-term borrowings; deducted from IV because debt is a prior claim on cash flows

C Cash & Short-term Investments — liquid assets held by the company; added back to IV as they belong directly to shareholders

N Shares Outstanding — divides total company value into per-share terms, making it directly comparable to the market price

Same 20-year DCF structure using Free Cash Flow (Operating Cash Flow minus CapEx) — reflects cash actually available to shareholders after reinvestment.

High Growth Phase — Years 1–5

Free cash flow projected at the highest rate g₁ for years 1–5, capturing the company's peak earnings expansion period.

Transition Phase — Years 6–10

FCF growth slows to g₂ in years 6–10, reflecting business maturation and increasing competition eroding excess returns.

Terminal Phase — Years 11–20

FCF grows at the terminal rate g₃ (≈ GDP growth) for years 11–20, representing the steady-state long-run rate a mature business can sustain.

FCF₀ Free Cash Flow = Operating Cash Flow − CapEx. Represents cash truly available to shareholders after reinvestment needed to maintain the business

g₁, g₂, g₃ Three-phase FCF growth rates, auto-calculated from historical FCF CAGR

r Discount rate (CAPM) = Risk-Free Rate + β × Equity Risk Premium

D, C, N Total Debt, Cash & Investments, Shares Outstanding — same definitions as OCF method

Same 20-year DCF using Net Income as the base metric. Suitable for asset-light businesses where earnings closely track distributable value.

High Growth Phase — Years 1–5

Net income projected at the highest rate g₁ for years 1–5. Best suited for asset-light companies (software, financials, consumer brands) where net income closely tracks shareholder value.

Transition Phase — Years 6–10

Earnings growth decelerates to g₂ in years 6–10 as profit margins normalise and competitive moats are tested.

Terminal Phase — Years 11–20

Earnings grow at terminal rate g₃ for years 11–20. This phase often dominates total present value, so the choice of terminal rate significantly impacts the final IV estimate.

NI₀ Net Income = Revenue − all expenses, interest & taxes. For asset-light companies, NI closely approximates distributable cash to shareholders

g₁, g₂, g₃ Three-phase Net Income growth rates, auto-calculated from historical earnings CAGR

r Discount rate (CAPM) = Risk-Free Rate + β × Equity Risk Premium. Higher beta → higher discount rate → lower IV estimate

D, C, N Total Debt, Cash & Investments, Shares Outstanding — same definitions as OCF method