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Technology Stocks : Dell Technologies Inc.
DELL 138.22-1.6%Dec 9 3:59 PM EST
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To: jhg_in_kc who wrote (59569)8/19/1998 2:59:00 PM
From: Chuzzlewit  Read Replies (5) of 176387
 
Just a game that us calculating pussies engage in. The question is how long could Dell possibly maintain a growth rate of triple the industry. Solve for n will give you the number of years at which Dell's growth could be 45% while the industry grows at 15%. Thereafter Dell would grow at 15%. Actually there is an error in the assumptions. The equation assumed that Dell had a 10 % market share. That number should be 8%. The revised equation should now be:

0.08*(1.45)^n = (1.15)^n

The solution is:

ln .08 + n* ln(1.45) = n* ln(1.15) (1)
n(ln(1.45) -ln(1.15) = -ln (.08) (2)
n = -ln(.08)/(ln(1.45)- ln (1.15) (3)
n = 10.9 years. (4)

Of course no company could grow like this. Growth will most likely be asymptotic, and Dell would never have 100% of the market. But the point remains that at least in theory Dell could continue hypergrowth for a number of years to come.
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