How did you Calculate my Growth Rate?

The growth rate used in your DCF model is a combination of your anticipated growth rate, in tandem with your historical growth.

We start with the anticipated future growth rate that you entered into the questionnaire. However, to prevent a falsely inflated valuation (since we use the DCF model), we will only allow a growth rate of 5% over your historical number. In other words, if you anticipate your future growth to be 30% but you’ve only been growing at 4% over the last several years, we will build your pro forma at a growth rate of 9% (since historically we can’t justify an increased rate of organic growth).