Valuation of Premiums
This excel quantitative model enables you to value the premium one should pay for growth when making a valuation.
The inputs needed to get an idea of this premium are:
- market capitalization
For this year and last year:
- book value of equity
- total det outstanding
- cash & marketable securities
- revenues
- operating income (EBIT)
This year only:
- effective tax rate
- net income
- expected growth rate in operating income
- return on invested capital on growth
- length of growth period
- cost of equity
- cost of capital
- riskfree
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)
The inputs needed to get an idea of this premium are:
- market capitalization
For this year and last year:
- book value of equity
- total det outstanding
- cash & marketable securities
- revenues
- operating income (EBIT)
This year only:
- effective tax rate
- net income
- expected growth rate in operating income
- return on invested capital on growth
- length of growth period
- cost of equity
- cost of capital
- riskfree
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)