1. In H Model, it is assumed that the growth rate declines linearly during the high growth period? If the high growth rate does not decline but remains constant, we cannot use H Model as we would not be able to calculate H? Then how the answer in after noon mock exam Q 50 is using H model when the growth rate remains constant at 20 % per year during 4 years?
2. In calculating the Working Capital for valuations (in FCFF and FCFE cals), we subtract cash and cash equivalents from current assets and N/P and current portion of LTD from current liabilities as mentioned in CFAI text. This was not done in finding the answer in afternoon mock Q 51? |