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What is supernormal growth rate?

Updated: 9/17/2023
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11y ago

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super normal growth rate is that growth rate which is not constant growth rate. it is flexible growth rate. it means some years or period growth rate is higher than other period. when it is gone constant growth rate certain period and than changed the growth rate, it is called super normal growth rate. some example, we can take here. company x has expected dividend per share is Rs 10. its growth rate is 5 % per year, for next 3 years. and than its growth rate should be changed 10 %.

it is the example of super normal growth rate. here, first 3 years has normal growth rate is constant 5% and than it is change by increasing to 10%. here super normal growth rate is start from end of year 3.

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