Long Term Growth Rate Definition & Application Wiki
Last Updated by WikiWealth
This is the rate of inflation in a conservative investment analysis. The expectation is that company revenue estimates will not surpass the inflation rate into the long term. Current US inflation expectations are 3%.
Growth rates above the 3% estimates are only appropriate if the investment time horizon is too short. This can occur, but with a 10 year horizon, this is unlikely for mature companies. LT growth estimates should not exceed the risk-free rate of interest as a good benchmark.