Wrong answers in CFAI Equity Section 2011, should, growth, change

Sunshine4ever

Equity Section Reading 46: Private Company Valuation P. 683 # 9

They subtracted the 5,150,000 of cap ex and the 900,000.

In my understanding, they should've only subtracted the 900,000, which is the change from last year in cap ex.

#15.

They take 28,800,000/(0.20-0.06) = 205.71 M

But shouldn't the numerator be multiplied by 1.06 (growth rate) =

(28,800,000 * 1.06) / (0.20 - 0.06) = 218 M


Thoughts?



Edited 1 time(s). Last edit at Friday, May 13, 2011 at 09:19PM by homie.