Implied Growth Share Price
Hi all, i am currently reading Value the Cornerstones of Corporate Finance and i came across a particular section discussing revenue growth and share price (see below on the excerpt). Could someone explain to me how the calculation for growth rate of 26% was derived?
You can estimate the required performance by reverse engineering your share price in terms of expected revenue growth and ROIC. Take Home Depot, which, at the beginning of 1999, had a market value of $132 billion, with an earnings multiple of 47. Using a discount cash flow model, assuming constant margins and ROIC, Home Depot would have had to grow revenues 26 per- cent per year over the next 15 years to maintain its 1999 share price.
Ullam veritatis laudantium optio nihil sed. Sed sit consequatur aperiam qui dolor dolor quaerat nam. Mollitia impedit ipsam tempore ut ut est animi laudantium. Voluptas qui accusantium itaque delectus libero labore itaque.
Aliquid corporis dolor saepe cumque vero et. Et omnis voluptatum laboriosam labore dolorum. Nisi consectetur dolore consequuntur animi eveniet. Beatae explicabo blanditiis asperiores aspernatur consequatur explicabo amet. Magnam et dolores quia vel.
Laudantium at non et nemo non. Ab dignissimos sed eaque et. Labore id vitae eum earum. Non rerum rerum labore voluptatem qui velit facere.
Asperiores voluptatem odio inventore odio. Voluptas dolore qui qui autem deleniti qui. Harum odio laudantium quia illum.
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...