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Question
Which of the following is true about the variable growth model?
a. Present value equals the discounted sum of the annual forecasts of cash flow
b. Present value equals the discounted sum of the annual forecasts of cash flow plus the discounted value of the terminal value
c. Present value equals the discounted value of the next years cash flow grown at a constant rate in perpetuity
d. Present value equals the current years free cash flow discounted in perpetuity
e. None of the above
Answer
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