pg 254 they’re in the example calc’ing normalized earnings and doing the method of ave ROE, you get the average ROE (easy enough) and then multiply it by BVPS. the example says year 2007 but then multiplies it by 2008’s BVPS. i’m assuming this is a little error/mistake in the text b/c in the wording it says multiply by the “current” BVPS and they do it by the 2008 (current) number. just want to double check, don’t see it in schweser’s errata. SS12 = formula bombardment! i think this is actually some of the more fun stuff in the text, but it’s sooooo many formulas to remember. for my old buddies from last year, most of which now have moved up a level, i just passed by MOLODOVSKY in the text and smiled.
I think the CFAI text also does the same. In 2008 is when the EPS falls -ve. So to estimate the EPS in 2008 - you have a +ve BVPS and the Average ROE For the previous periods - multiply the Average ROE * BVPS for 2008 to get the EPS estimate for 2008.
perfecto, just wanted to verify. now to go do the concept checkers and see how many i can remember without cheating and looking at my notecards for formula. at this stage in the game, it might not be pretty. late afternoon residual income anyone? good times.
Equity seems easier than last year…Not much porter’s diffrentiation stuff which killed me last year. Hopefully all the concepts and formulaes stay in my mind till June.