Question on Residual income topic topic, income, 2010, discount

BelalM

Schweser notes (Equity Investments) - Question 15 of Residial Income valuation.
In calculating the PV of continuing residual income, they leave out residual income R(t) which is 6.25 for 2010. I think this is an error.
the formula is (Pt -Bt) + Rt/1+r , but they just discount (Pt - Bt) to get the PV of continuing residual income.
Any one can take a shot at this?

noel

if you are still having a hard time with it, sure why not
sarah.berg@live.com

d2rockstar

this question was from schweser 2010. I think they have removed it from the 2011 version. however i can email you the question if you want.

soddy1979

I am not able to locate the question…
question 15 in my Schweser 2011 book in the residual income one is a subjective one, no numbers…