How do we know repurchase yield is subtracted here without more information (e.g. buying back shares)? Also, why is the nominal earnings growth return used for earnings growth and not the expected real earnings growth plus expected long term inflation? I thought we should be using forward looking (expected) information for the earnings growth component…
Thanks
nominal earnings growth return used for earnings growth and not the expected real earnings growth plus expected long term inflation
because the question asks for historical nomincal return and not expected.
use search…this ques & REPURCHASE yield discussed few days ago only…
^ true,
ill make it short…
If shares decreased - > D1/P0 - ( - %)
If Repurchase yield is - means you’re not repurchasing => the opposite of shares decreased , which is + … thus D1/P0 - ( % )
that’s how i got it.