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What is the two-stage growth model?

Published on 2025-03-27 | Last edited on 2025-03-27
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Short Answer

The two-stage growth model values a small business by splitting its future into an initial high-growth phase (5–7 years) and a subsequent perpetual growth phase. Cash flows are discounted using a rate from the build-up method, and the terminal value uses the Gordon Growth Model.

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