According to the nonconstant growth model discussed in the textbook, the discount rate used to find the present value of the expected cash flows during the initial growth period is the same as the discount rate used to find the PVs of cash flows during the subsequent constant growth period.

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According to the nonconstant growth model, the discount rate used to find the present value of cash flows during the initial growth period may be different from the discount rate used in the subsequent constant growth period. However, the model assumes that the discount rate remains constant during each period.

According to the Nonconstant Growth Model Discussed in the Textbook