No. of Recommendations: 1
Dear thalseth,

This is a real problem; this method involves projections into the future, which are hard to do.

As far as required rate of return for the firm, the EVA formulation says that for the firm it is the WACC (and you can calculate the return for equity holders presumably). I think that plugging in what you require for your investment (say 15%) is fine as a good first estimate.

Lleweilun Smith
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