equity: ibbotson-chen earnings model model

therecruit

where I could find the formula? It is not on the formula sheet. Thanks.

scarecrow

yeah, i had this question about a month ago too (because its an EOC).

i'm going to ignore it - cant imagine more than one question. And if it does come up, i'm assuming one of the "wrong" answer choices will be like the CAPM calculation or something - so i will hopefully be able to eliminate bad choices..

luda002

It is an EOC question so it is fair game on the exam, one would think

profil

I won't even bother with this one.

Rasec

I will attempt to remember this if I'm scoring 85+ on mock exams. Until then (maybe next year if I fail), I'll use my braincells on easier fish to catch.

RMontgomery

growth in eps and growth in real gdp should be the same, and we assume they are. cfai text says if they are not then you adjusted real gdp.

ayodayo

its a fundamental model

={(1+inflation rate)(1+ growth in gdp)(1+growth in P/E) -1}+ reinvestment rate on dividends - risk free rate

*there was a question in one of the vingettes i remember

iteracom

{[(1+InflationRate)(1+RealEarningGrowthRate)(1+PEratio)-1]+DividendIncome} - RiskFreeRate

It merely isolates the equity risk premium.

Swanand

It's depressing seeing something in a title of a thread and not having a clue what it is...

Newhuman

is this on the test?