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)