标题: Schweser justified P/B problem in residual income [打印本页] 作者: bleach 时间: 2013-4-11 10:03 标题: Schweser justified P/B problem in residual income
Hey guys. Can anyone explain to me why in problem #10 of study session 12 they added a 1 before the justified price to book formula.
I thought is was P/B= ROE-r/r-g.
In the problem you are asked to solve for ROE but they use P/B=1+ ROE-r/r-g.
What am I missing?作者: ninja1024 时间: 2013-4-11 10:04
nothing
simplify, use a simple bit of algebra
and you will see that both expressions are the same
1+(ROE-R)/(R-G)
= [R-G+ROE-R]/(R-G) = (ROE-G)/(R-G)作者: spartanag07 时间: 2013-4-11 10:05
I see my mistake now thanks for the help.作者: BC_MBA_student 时间: 2013-4-11 10:06
In the book I think its P0/B0, not P0/E0 ;)作者: Kiakaha 时间: 2013-4-11 10:07
That may be the difference between us. I like to understand the intuition behind the equations instead of memorizing them. Thats what I was always tested on vs. plug and play.
