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10 June 2008 |
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Valuation Details
| Member: | TheCrunchBlog |
| On: | 01 Sep 2008 |
| Views: | 272 |
| Comments: | 1 |
| Updated: | 2 hours ago |
| Ticker: | KO |
| Market: | NYSE |
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/09/anyone-for-a-cheap-coca-cola/
KO grew revenues from US$21.7 billion in 2004 to US$28.9 billion in 2007 – a 9.9% compound annual growth rate. Our assumptions of revenues for the next three years are US$33.15 billion in 2008 growing to US$36.65 billion in 2010 – an 8.3% compound annual growth rate. We have projected EBITDA margins to be 29% in 2008 then flat at 30% to 2010. We have used a terminal growth rate of 3.25%. We calculated this terminal growth rate based on year three (2009-10) growth of 4.1% dropping to a 3.0% stable growth rate by year 10. We used a terminal capital expenditure number of US$1.75 billion. We have used a WACC (discount rate) of 8.0%.