标题: RI Model Question [打印本页] 作者: dontknow1987 时间: 2013-4-5 23:57 标题: RI Model Question
Hi everyone,
On pg. 285 of schweser bk 3 they talk about calculating PV of conitinuing RI in Year T - 1 using forecasts of P/B and book value.
What I don’t get is the following formula,
PV of cont. RI in year T-1 = [( Pt - Bt) + RIt] / (1 + r)
I don’t get why they add RIt to the numerator.
Sorry if my notation doesn’t really make sense,作者: iteracom 时间: 2013-4-6 00:00
it is likely that RI model uses the ending value to calculate the beginning value, kinda backward calculation similar to NPV.
if you would see T-1 as T0 (present), then RIt = RI1
