It is not possible to value a firm that has a supernormal (variable)growth rate for the first few years of its life.

Question

Quizplus · Accepted Answer

It is possible to value a firm with a supernormal growth rate for the first few years by using a two-stage or multi-stage dividend discount model (DDM) or discounted cash flow (DCF) model, which accounts for the variable growth period followed by a stable growth period.

It Is Not Possible to Value a Firm That Has