标题: CPK- PVGO (no growth?) [打印本页] 作者: bcp901 时间: 2011-7-11 20:04 标题: CPK- PVGO (no growth?)
CP
I found you mentioned the below on another post and want to confirm that you would use E0 instead of E1 for the PVGO calculation, question 8C on p.360 vl4. So you assume that there's no growth even though g=1-payout(ROE)? Why assume no growth and why the CFAI book is showing to use E1 on formula (12) p.325?
E0 vs. E1 is reprised on Q8(C) in the curriculum
> on the chapter as well.
>
> PVGO only applies to "no-growth" company. So use
> E0, even if E1 is given or g is provided and
> enables you to be able to calculate E1.
Thanks
Edited 1 time(s). Last edit at Tuesday, May 18, 2010 at 10:32PM by adee1031.作者: Rasec 时间: 2011-7-11 20:04
its still the same. if today (2008) the company has $2 EPS, as this isn't changing becasue the company pays out everything, it will still be $2 next year, hence the perpetuity.作者: RMontgomery 时间: 2011-7-11 20:04
Think of it this way- you can still use E1, it's just that since g=0, E0=E1.
