A simple valuation model is presented in which a firm can invest in projects with positive net present values for a limited number of years. Although prior models have made this assumption, this model can be simplified to a concise, easy-to-use form. The model can facilitate a broad understanding of the expectations implied by a firm's stock price—for example, growth patterns consistent with a firm's P/E—which can guide in-depth analysis of prices.
![Bridge over ocean](/-/media/images/hero/rpc-theme-heros/bridge-default.jpg?w=2560&hash=C67CE44B69F875C23628FEF2E3F26808)