Is it always true that r>g? (DDM related questions)
In DDM model, we always assume that r>g. (If not, it make no sense mathematically.)
In real business, except some extreme cases, is it always true that r>g?
In DDM model, we always assume that r>g. (If not, it make no sense mathematically.)
In real business, except some extreme cases, is it always true that r>g?
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You use this for a perpetual growth risk should therefore always cost more than perpetual growth if not your growth assumptions are probably incorrect or the company hasn't reached a mature state of growth.
Thanks a lot!
If you project 8%+ growth until.. forever, better check the size of your company versus the world economy in 100 years. Expand the forecast in order for the growth to come down and reach a steady state from where you can take a terminal value.
Thanks, that really helps!
haha unless you work at Lazzard
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