Purchase Solution

Why growth rate models are practical and convenient to value

Not what you're looking for?

Ask Custom Question

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

Purchase this Solution

Solution Summary

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

Solution Preview

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 provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.