(86.74 * 1.05) * (1 - (.05/.17))) /(.15 - .05)= 7.4 * 86.75 = 642.86 Which brought back to the present gets you 39.28 for every dollar of current earnings or a mutliple of 39X to get a 15% return into infinity. If I only wanted a 12% return, I could pay 56X times earnings.howardroark, If I read this correctly, the formula you used to calculate the terminal value translates as follows:Present value of ((Future value of stage earnings * Stage 2 growth rate) * (1 – (Stage 2 growth rate/Stage 2 return on equity))/(Required return – Stage 2 growth rate))When I run these numbers for a 12% return, I get 95X earnings. For the 6% value, I get 2,016X. What am I missing? Did you intentionally use the 15% rate to get back to present value?