Understanding why all P/Es are not created equal (McKinsey article)
I'm keen to understand how to disaggregate a P/E multiple into value from current performance with no growth, a ROIC premium and value of expected growth similar to what's illustrated in exhibit 3 of this McKinsey article: http://www.mckinsey.com/business-functions/strate…. I've in the attached tried to work through the examples in exhibits 1 and 3 and arrive at slightly different numbers in terms of implied P/E for Growth Inc in ex. 1 and the ROIC-growth decomposition in ex.3 and wanted to doublecheck if it's just a case of the article not including a full list of assumptions or an issue in my undestanding.
Many thanks for any help in advance
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