solved What are the common estimation approaches for the long-term growth

What are the common estimation approaches for the long-term growth rate (g)? Discuss the pros and cons of the estimation approaches you listed.
Response 1
The two common estimation approaches are using comparables and using macroeconomic variables.
When using comps, market multiples are used to help find the growth estimate. A common multiple used is EV/EBITDA because this captures total firm value and not just the equity value. The formula is reconstructed to solve for the missing growth rate. One drawback is that the multiples can be skewed during cyclical periods causing the estimates of the growth rate to vary greatly.
When using macroeconomics, variables such as GDP are commonly used to forecast growth estimates. This is pretty intuitive because the growth rate of a firm or industry stems from the overall GDP. One drawback is that growth rates between industries can vary greatly.
Response 2
There are two common estimation approaches for the long-term growth rate.
The first one is EV/EBITDA multiple. This method is relatively convenient and time-saving because we can easily access comparable company data from Bloomberg and Yahoo Finance platforms. However, since EV/EBITDA multiple uses comparable companies for valuation, an imperfect composition of comparable companies possibly results in inconsistent value estimates. Moreover, this approach is dependent on the valuation of comparable companies by the market. Therefore, when the market is overvaluing comparables, EV/EBITDA multiple will result in too high estimates.
The second one is macroeconomic variables, including GDP, inflation rate, interest rate, exchange rate, etc. The long-term growth rate typically ranges between the historical inflation rate and the average GDP growth rate. Therefore, using macroeconomic variables to estimate LTG can let companies know where they stand in the economy. However, for large companies relatively independent of the economy, this method is not very effective.