Question

which growth rate is taken in the valuation .. is it the gdp or ebitda growth rate.. please reply

Answer 1

The growth rate in valuation is the growth rate in your company's numbers, but GDP growth lurks in the background. If you are in a slow growing economy, odds are that your growth rates will also be lower (though not necessarily equal to the GDP growth rate)

Answer 2

We have opted for perpetuity growth rate for a company as a near by number for country's GDP growth rate keepin in account the inflation rate. However, the particular industry is growing at much higher rate than the GDP. Please suggest if I to account for the industry growth as well?

Answer 3

For perpetual growth, you have to stick with GDP growth. If your sector has high growth, add to your high growth period until the sector's growth stabilizes. After all, sectors face the same mathematical challenge of not being able to grow faster than the economy for the long term.

Answer 4

The growth rate is calculate using arithmetical, geometric or regression?

Answer 5

Thanku Aswath Sir!!!