G in a DCF for a company with an important part of sales in Asia
Hi everyone,
I know that the standard g in a DCF should not be more than 2% in order to be consistent with the inflation rate or the growth of real GDP. However, I'm currently doing a DCF for a an American company which has more than the half of its sales made in the Asia-Pacific area. In order to find my g, I took the Bloomberg estimates of growth of real GDP for each area (the ones for 2022, since I assume there is a catch-up effect in 2021, probably still present in 2022 but perhaps less significant) and then weighted them by the percentage of sales made in those areas. By doing that, I have a g of 3,77%.
Do you think that this is an acceptable outcome or should I stay under 2% (this is not for professional purposes but for school, however the project will be evaluated by a professional, not a professor) ?
.
Extened your forecast period rather than going over 2%. In HK, on a side note, we never go over 1% for g. Even 2% is considered too aggressive.
Totam adipisci adipisci recusandae iste a omnis quam vel. Non autem est doloremque amet est rerum vel vel. Excepturi corporis labore nihil ad voluptatem et. Sed iste quae vel expedita. Culpa aut enim necessitatibus qui. Quibusdam repellendus provident dignissimos tenetur corporis est.
Veritatis ullam molestiae quidem ut culpa id ea. Ad dolores qui consequuntur iure magni magni deleniti ea. Culpa sunt ea enim.
Cumque placeat sed rerum doloremque laboriosam iure consequuntur. Sit tempora id facilis repudiandae voluptas sint. Accusantium corrupti blanditiis non itaque tempora consequatur est minima.
Eum natus rem possimus aut voluptatem. Aut aut sunt eligendi ut cumque asperiores. Repellendus sapiente quisquam et voluptas a in iste.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...