In Q.53 why not GGM? Please explain. Thank you!
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There are three stages of growth in HLTV and GGM is used when the growth rate is for infinite period.
Hey Menon thanks for responding. But, in the last line it’s written, before stabilising…..growth rate, that too means after attaining maturity growth will be constant for infinite period, right?
Yes, we will use GGM in the third stage of the growth and discount it to find IVo. GGM would have been the right answer when the growth is at constant rate from today itself.