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Question
Which of the following is not true about the variable growth valuation model?
a. Assumes a high growth period followed by a stable growth period.
b. Assumes that the discount rate during the high and stable growth periods is the same.
c. Is used primarily to evaluate firms in high growth industries.
d. Involves the calculation of a terminal value.
e. The terminal value often comprises a substantial percentage of the total present value of the firm.
Answer
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