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Most people may agree with this statement and believe higher growth is always good. However, this is not always true! Are higher revenue growth rates always good – as in does higher revenue growth always lead to higher valuation?
This page addresses if a company with high growth rates have low valuations and why?
Most people may agree with this statement and believe higher growth is always good. However, this is not always true! Are higher revenue growth rates always good- as in does higher revenue growth always lead to higher valuation?
Excess returns can be viewed in many ways. In a DCF valuation context, excess returns are returns above the cost of capital. This article explores when a firm can earn excess returns. This page also discusses the conditions required to maintain excess returns?
Why is this important in your DCF context? This is important in a DCF context as you have to make assumptions about growth and returns in your valuation model.
The reinvestment rate measures how much a firm is plowing back to generate future growth. So clearly the reinvestment rate matters for growth. How does the reinvestment rate correlate with growth and therefore with the value of a business? We explore how the reinvestment rate impacts the value of a business in DCF valuation in this article.
How does the reinvestment rate impact the value of a business in DCF valuation?