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10 June 2008 |
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Valuation Details
| Member: | TheCrunchBlog |
| On: | 29 Jun 2008 |
| Views: | 212 |
| Comments: | 1 |
| Updated: | 2 hours ago |
| Ticker: | GM |
| Market: | NYSE |
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/06/valuing-general-motors-beyond-the-53-year-low/
GM’s revenues decreased from US$195.3 billion in 2004 to US$181.1 billion in 2007 – a (2.5%) compound annual growth rate. Our assumptions of revenues for the next three years are US$173.75 billion in 2008 growing to US$190.25 billion in 2010 – a 4.6% compound annual growth rate (2008-10). We have projected EBITDA margins of 4.5% in 2008 then a flat 5.5% moving forward. We have used a terminal growth rate of 3%. We calculated this terminal growth rate based on year three growth of 3.5% dropping to a 3% stable growth rate by year 10. Our view is that this growth is coming from outside the US market – GM has approximately 60% of sales from international (i.e. non-US) markets. We used a terminal capital expenditure number of US$8.5 billion. We have used a WACC (discount rate) of 9.5%.