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    Why growth rate models are practical and convenient to value

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    Why are growth rate models practical and convenient ways to look at stock valuation? Support your answer with three academic and/or industry references?

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    First reason: mathematical simplicity.

    Growth rate models allow you to assume a certain change over time of the firm's earnings and easily compute a value mathematically without having to compute the revised earnings in each year. That is, once you have the initial ...

    Solution Summary

    Your tutorial is 159 words and gives two different reasons that growth rates are practical and convenient for valuing stock.