Sean, the founder of SeanCarp Inc, asked to assess the value of equity of his company (SeanCarp Inc), a rapidly growing software firm. You have been supplied with the current levels and forecasted revenues and net income of the company for the next 3 years (all in millions):

	Current Year	1	2	3
Revenues	500	600	700	800
Net Income	50	72	98	128

You have run a regression of PE ratios against expected revenue growth and net margin (i.e. NI/sales) across software firms in the market right now and arrived at the following:

PE = 4.5 + 80 (Annual (CAGR) Revenue growth in next 3 years) + 40 (Current Net Profit margin)

R2 =60% (The regression uses decimals. Net margin of 20% would enter the equation as 0.2)

1. 23.4
2. 24.47
3. 17.33
4. None of the above