PVGO

CFA Level II Equities
#1

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?

#2

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

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

#3

Thank you so much s2000magician!