A little bit of growth is a big deal

Description

Abstract: When valuators use the income approach, long-term sustainable growth is an important assumption. That’s because a small difference in the projected growth rate can have a big impact on business value. This brief article uses an example to look at why long-term sustainable growth rates matter, and notes that, whenever a valuator makes assumptions about expected growth, it’s important to ask whether the assumptions make sense compared with other economic indicators.