This question is related to the Fed Model. The calculation in the answer includes earnings growth for the market index.
I thought one of the weaknesses for the Fed Model is that it ignores earnings growth?
This question is related to the Fed Model. The calculation in the answer includes earnings growth for the market index.
I thought one of the weaknesses for the Fed Model is that it ignores earnings growth?
Fed Model takes Forward Earnings yield into account not the current Earnings yield.