Question

what is multistage growth model?​

Answer 1

The multistage growth model rates the preferred stock of a corporation on the basis of the expectation of a gradual rise in payments made to its common equity owners.

• The method is the way of stock valuation. This means an enterprise's dividends can continue to increase forever at a continual rate of growth.

• The constant growing approach presumes that an enterprise can typically continue to produce cash flows at a constant pace continually.

Answer 2

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The multistage dividend discount model is an equity valuation model that builds on the Gordon growth model by applying varying growth rates to the calculation. Under the multistage model, changing growth rates are applied to different time periods.