Explore BrainMass

Explore BrainMass

    Why growth rate models are practical and convenient to value

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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

    © BrainMass Inc. brainmass.com March 5, 2021, 12:23 am ad1c9bdddf

    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 Summary

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