Solution:
“Intrinsic P/E = (1 – b) / (r – g)”
The inputs to the solution in this problem are based on most recent period data - not forecast data. As such, it seems the information being utilized is best suited for TRAILING P/E, in which the correct notation would be:
“Intrinsic P/E = (1 – b)(1+g) / (r – g)”
Can anyone provide guidance on the correct angle to approach this problem, and why it is evident here?作者: ajpheif16 时间: 2013-4-8 17:38
if you are using it to forecast valuation - leading P/E would be the right one to use..作者: thecfawannabe 时间: 2013-4-8 17:38
Yes…we are forecasting…I just think of “intrinsic” P/E as the usual payout/r-g. We don’t want trailing P/E, we want leading P/E as cp says
