We did a reverse valuation to calculate the growth rate the market is assuming for NPK to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

This is the annual growth rate we've applied to calculate NPK's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.