Can we apply the growing perpetuity equation for negative growth as well?
What will be an ideal response?
Answer: Yes, it is perfectly in order to apply the growth perpetuity for negative growth. A negative growth gives two negatives in the denominator making it larger than a positive growth thus reducing the valuation compared to a positive growth of similar magnitude.
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Indicate whether the statement is true or false
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Answer the following statement true (T) or false (F)
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