The fundamental discount considers the difference between the subject company's expected growth rate and the growth rate for the companies represented by the industry multiples.
The fundamental discount affects the Earnings Multiple on the Indicated Value worksheet. To apply the discount, turn the Fundamental Discount assumption on.
If you have already downloaded SBBI data into the Analysis file, the risk free rate of return and the common stock premium on the Fundamental Discount worksheet will come from the SBBI data. If not, you can download the data now, or enter it manually by overwriting the blue text cells.
The Company Risk Premium is calculated on the Company Specific Risk worksheet. To access the worksheet, click on the Company Specific Risk button on the Desktop Toolbar.