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