Fuller-Hsia · H-Model
Within the dividend discount framework, assumes growth fades linearly from a high initial rate to a perpetual rate, approximating the two-stage model with a closed-form solution and avoiding valuation jumps from abrupt growth changes.
- Guide level
- Practical
- Output
- Intrinsic value
Core formula
Value = [D₀(1 + gₙ) + D₀·H·(gₐ − gₙ)] / (r − gₙ), with H = half the high-growth periodHow to interpret it
Within the dividend discount framework, assumes growth fades linearly from a high initial rate to a perpetual rate, approximating the two-stage model with a closed-form solution and avoiding valuation jumps from abrupt growth changes.
The output should be read as a scenario or decision aid, not as a guaranteed price target. Compare it with at least one method based on different economic assumptions.
Practical workflow
- Normalize the latest public financial and operating data.
- Choose assumptions that match the company's economics and accounting structure.
- Calculate conservative, base and optimistic cases where the method permits.
- Compare the result with market pricing and an independent valuation method.
- Document the assumptions that drive the largest changes in value.
Key limitation
An approximation of the two-stage model; accuracy drops when the initial and terminal growth rates diverge sharply.
How Stockinsky uses it
Stockinsky uses this framework only when the company type and available data support it. Professional valuations expose assumptions, sources and warnings instead of presenting false precision.