I am having little confusion to understand models. Here is what I understood 2 Stage model It looks like two steps growth falling abruptly 3 stage model It looks like three steps growth falling abruplty two times 3 Stage H model It looks like two steps connected ramp (linear fall). Basicall 45 degree line between steps. Is there 2 stage h model? Are there any sites to explain these models with picture?
H model has decline of high growth rate gS to low growth rate gL over time 2*H and then infinite growth at gL. formula: P = D0*(1+gL)/(k-gL)+D0*H*(gS-gL)/(k-gL)
giribk Wrote: ------------------------------------------------------- > I am having little confusion to understand models. > Here is what I understood > > 2 Stage model > It looks like two steps growth falling abruptly > > 3 stage model > It looks like three steps growth falling abruplty > two times > > 3 Stage H model > It looks like two steps connected ramp (linear > fall). Basicall 45 degree line between steps. > > Is there 2 stage h model? Are there any sites to > explain these models with picture? I don’t think there is a 2 stage model because there are 3-stages that are inherant in the formula, like maratikus said. higher growth - linear decay - terminal growth.
H model is begins with a downward sloping line, ends with flat horizontal. See page 163 in book 4 of schweser. Worded similar to “firm has a growth rate of x that will decline over the next t years, until settling at the long term growth rate of z”
I just looked at book and it illustrates well. I got confused thiking that 3 stage model can be combined with h model two times by having first slope line connecting second stage to first and second stage connecting third stage. I guess it does not make sense.