ARGH!!!

But would the H model be used in the case of FCFE? It says FCFE in the question. As far as I know it is a dividend discount model.
Can someone correct me please?
 
mumukada Wrote:
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> damn you guys are fast!!! do you all have a paper
> weight on your F5 button or what???
How did you know? But the weight keeps falling and I miss a question or 2. Any permanent solution to this?
 
Yep, I’m thinking B) and C) are definitely out. You would use the H-model for C) (ie. gradual, linear drop decrease in g)
I’m trying to rationalize the barriers to entry thing…thinking that they would experience supernormal growth in a period where they have no competition. At some point, that would take a nose-dive off the cliff I think if a flood of new competitors finally made it in the door. I don’t know…I could see them trying to trick us with some BS like this where we have to incorporate some rational of the industry life cycles or something.
I’ll go with A)
 
how come no one is jumping on the storko train and choosing A?
two stages, before and after.
 
A version of the H model can be used with any discounted cash flow model (ie Dividends, FCFF, FCFE).
 
I thought any model could be used for Dividends and FCFF or FCFE. You are just using differect cash flows to discount, but I could be wrong wonder.
 
storko Wrote:
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> how come no one is jumping on the storko train and
> choosing A?
> two stages, before and after.
Why do you think barriers to entry would change? Maybe you can convince me to jump on the train.
 
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