P/E and justified P/E (Trailing)
From CFAI book:
Harry Trice wants to use the Gordon growth model to find a justified P/E for the French company Carrefour SA, a global food retailer specializing in hypermarkets and supermarkets. Trice has assembled the following information:
Current stock price = €23.84.
Trailing annual earnings per share = €1.81
Current level of annual dividends = €0.58.
Dividend growth rate = 3.5 percent.
Risk-free rate = 2.8 percent.
Equity risk premium = 4.00 percent.
Beta versus the CAC index = 0.80.
Now if I calculate : P0/E0 = 23.84/1.81 = 13.17
and if I calculate the trailing P0/E0 = (1+g)*(1-d)/(r-g) = 13.248
Why are these two number different wouldn’t the direct calculation of P0 / E0 be the same as (1+g)*(1-d)/(r-g)
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