Terminal Growth Rate
I would appreciate if anyone could good provide a good explanation for the below queries:
1. The higher the terminal growth rate, the higher the value. However, it changes when the growth rate gets higher than the cost of capital as the terminal value becomes negative. How does it being greater than the cost of capital, change the whole scenario?
2. The only constraint on growth rate is that it be less than the GDP growth rate otherwise it will become greater than the economy. Is there any better explanation why it can't be greater than the GDP growth rate? How do they both connect?
Analyst2021, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:
More suggestions...
If those topics were completely useless, don't blame me, blame my programmers...
Iure eos adipisci itaque. Voluptatum eveniet quibusdam et velit. Dolor tempora et illo delectus autem nobis tempora.
Eum soluta molestias nobis sit iste consequatur. Praesentium occaecati qui alias minima aliquam. Laborum voluptatem quod suscipit nemo ut id.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...