To estimate the future price with future EBITA

To estimate the future price with future EBITA

Expected price = CMP*(1+Future EBITA)

For Ex:  CMP : 56 

1) If Future EBITA -40% , then Expected price = 56*(1-40%) = 33.6

EBITA -20% , then Expected price = 56*(1-20%) = 44.8

EBITA 0% , then Expected price = 56*(1-0%) = 56

EBITA 15% , then Expected price = 56*(1+15%) = 64.4

2) To predict price for next 3 years with current EBITA 

1st Year = 56*(1+15%) = 64.4

2nd year =64*(1+15%) = 74.06

3rd Year = 74.06(1+15%) =85.16

If interest rate comes down multiple will expand. 

If interest rate goes up multiple will contract.