Q. Based on Exhibit 2, which stock can most appropriately be valued using a three-stage DDM with the second and third stages being treated as an H-model?
- BIOK
- CCAX
- HLTV
Ans: A
Why C is incorrect?
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
In H Model, there is a Linear decline in Short term growth rates. And, slowly it converges itself with Long term growth rate.
This is present only in BIOK.
In HLTV, although decline is there, but that’s not linear. Thus, you can’t use H Model.