标题: Grr IPS retrun Calc Before Tax [打印本页] 作者: karoliukas 时间: 2013-4-1 13:47 标题: Grr IPS retrun Calc Before Tax
I have been operating on the formula for IPS retrun Calc of
Lets say real return needed is 5% there is a tax rate of .20 and inflation is three percent
I have been
.05/(1-.2) + .03 = .0925
I just saw in my notes (which i think is wrong)
(.05+.03)/.80 =.10….
Which is the right way? The first?作者: liquidity 时间: 2013-4-1 13:48
Found it…Question 1 2009…
Its the first one…
.05/(1-.2) + .03 = .0925作者: cjs238 时间: 2013-4-1 13:48
Add Inflation last , that’s what I thought作者: Andreas42 时间: 2013-4-1 13:48
inflation is addressed with after-tax dollars作者: fishmarket 时间: 2013-4-1 13:48
Just did a Schweser question that asked for the nominal before-tax return. Ex: [(1.05)(1.03)] / .7作者: tango_gs 时间: 2013-4-1 13:48
real after tax return as starting point. add inflation to get the nominal after tax return. divide that by 1-t to get the before tax nominal before tax return. this to me makes the most sense as you would be taxed on the nominal return (which is what is implied if you work the above backwards starting with before tax nominal return.作者: random_walker47 时间: 2013-4-1 13:48
^ I agree with the reasoning of smithyse but in most of the answer keys i have seen uses R/(1-t) + inflation
So I think instead of adding, multiplying the inflation would be the safest way to go.
For example, [(1+R)*(1+I)/(1-T)] -1 would be give the same answer as [(1+R)/(1-T)*(1+I)] -1作者: lucasg85 时间: 2013-4-1 13:48
I had this problem a few days ago. if you multiply you are taxing inflation which does not make sense. i think it would be post tax return / (1-t) + inflation
