Asked by Sonia Sheikh on May 10, 2024
Verified
In a multi stage growth model, the majority of the value can be found in the ______________.
A) near term dividends
B) discount rate
C) dividend growth
D) terminal growth rate
E) None of the options are correct.
Terminal Growth Rate
The rate at which a company is expected to grow its dividends or free cash flow beyond the forecast period, into perpetuity, during valuation.
Multi Stage Growth Model
A valuation method that applies different rates of growth to a company's earnings or dividends over various time horizons.
Discount Rate
The interest rate used to determine the present value of future cash flows.
- Understand the components and importance of growth in the multi-stage growth model.
Verified Answer
Learning Objectives
- Understand the components and importance of growth in the multi-stage growth model.
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