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This question is from IFT Mock.

I know the formula is V0 = E1/r + PVGO

IFT says E1 is the constant level of EPS or the average earnings of a no-growth company, thus it uses the E0 figure given from the question

I remember clearly from Kaplan mocks that I am supposed to use E0*(1+g) to arrive at E1 to figure out PVGO

Which one is right?

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I’ve had this discussion with CFA Institute.  Use E1.

(Unless, of course, you don’t want to get a point for your answer.)

Simplify the complicated side; don't complify the simplicated side.

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Thank you so much s2000magician!