Intrinsic P/E (Which one) tend, someone

AndyNZ

If you are asked to find Intrinsic P/E, would you automatically assume it to be Po/E1 i.e. the Leading P/E value?

CFAI mocks tend to do so.

Can someone explain why this is the case?

I mean....why can't Po/Eo (trailing) be the intrinsic value?

Many thanks!

BelalM

In explaining this issue in text, CFAI uses E1, but in EOC question it uses E0?

troymo

I think it depends on the data given and the accuracy of them.

If you are given both trailing and leading EPS then I assume that since valuation is a forward-looking process you should take the leading alternative, given that you are confident.

This is the most reasonable explanation I can think of.

SpyAli

s**t I always thought intrincis P/E was the P/E based on the gordon growth model, can someone please confirm if I am incorrect