Eternal growth rate
This article was the basis of content and / or formal deficiencies in the quality assurance side of the portal economy entered.
You can help by eliminating the shortcomings mentioned there or by participating in the discussion .
The perpetual growth rate (also long-term growth rate ; English Terminal Growth Rate ) is a parameter in investment calculation models . It represents the assumed growth rate of a company's profit or a payment (e.g. a dividend). The amount is usually based on the average of the growth rates achieved in the past. Such a perpetual growth rate is required to calculate the final value of an investment project, given an infinite term. This is typically the case with commercial enterprises, as they are valued under the assumption that business operations will continue in the long term.
backgrounds
The basic assumption behind the perpetual growth rate is that the expected costs and revenues of an investment increase (or decrease) with this percentage forever.
To calculate the value of an investment or a company, the perpetual growth rate is used, for example, in the Gordon Growth Model .