Discounted Cashflow

Company XYZ has been experiencing an annual revenue growth of 20% over the past 5 years because of good market condition. In the most recent management interview, The CEO hinted that such high growth rate cannot continue forever and likely to drop to 5% over the next 5 years. At the same time, He highlighted that the staff and raw material cost have a significant increase last year and the increase is likely to be permanent. B D E 25.8% 18.3% 20.1% 16.2% 20.1% 3.0% 20 Revenue Growth 21 Revenue Growth Rate (next 5 years) 22 23 Terminal Growth Rate 24 25 risk free 26 market 27 beta 28 required return 2.7% 10.0% 0.59 8.0% In view of the slowing growth to 5%, what adjustment will you make to the spreadsheet? A. Change B21 to 5% B. Change B28 to 5% c. Change B23 to 5% D. Change B26 to 5%