Discover and read the best of Twitter Threads about #DiscountingRate
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#MustRead #NIFTY #CostOfCapital
How Does #Rising #InterestRates/ #CostOfCapital/#DiscountingRate Impact Stock #Valuations. A STUDY of large Cap INDIAN Stocks
A long THEAD, pls stay with me...Exercise Shows a #StockWise Impact of Higher Discounting Rates & Implied Long Term Growth
How Does #Rising #InterestRates/ #CostOfCapital/#DiscountingRate Impact Stock #Valuations. A STUDY of large Cap INDIAN Stocks
A long THEAD, pls stay with me...Exercise Shows a #StockWise Impact of Higher Discounting Rates & Implied Long Term Growth
Exercise based on Div Discounting Model (DDM) for Current GSEC vs 8.5% GSEC (Every Justification for it to be 9%).
Starting with #Reliance
Tab 1: Stk px implies 14% CAGR LT Growth (8yr + 8yr) @ 7.45% GSEC
Tab 2: Same Growth (14% CAGR) @ 8.55% GSEC
=>18% Lower Fair Value(Rs2062)
Starting with #Reliance
Tab 1: Stk px implies 14% CAGR LT Growth (8yr + 8yr) @ 7.45% GSEC
Tab 2: Same Growth (14% CAGR) @ 8.55% GSEC
=>18% Lower Fair Value(Rs2062)
Higher Global Interest Rates to counter Inflation => lower Growth. Past 11yrs, High Growth & Low Interest Rate Environment, RIL growth: Revenues ($ linked) at 9.2% CAGR & EPS at 9% CAGR over FY11-22... So Assuming EPS growth @ 14% CAGR in prev tweet is AGGRESSIVE
