zephyranalyst

Dreary Wrote:
-------------------------------------------------------
> P/E1 = 1/(r- FlowThrough%*Inflation).
>
> Why the complex formula?
>
> r here is nominal...you can always go back and
> forth between real and nominal, nominal rate =
> real rate + inflation.

The other formula maybe more intuitive since you add to real required return whatever left of inflation due to flow-through.



Edited 1 time(s). Last edit at Friday, June 3, 2011 at 07:00PM by jpsi1.