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Graham growth formulaAnalyst
Graham’s revised formula using expected growth and bond yields.
What you’ll enter
- Earnings per share
- Expected growth, next 7–10 years
- Current AAA corporate bond yield
- Current share price (optional)
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The formula
V = EPS × (8.5 + 2g) × 4.4 ÷ Y
g and Y are entered as percentage numbers (6 for 6%). 8.5 is Graham’s P/E for a company with no growth, and 4.4 was the AAA yield when he wrote the formula.