I was hoping someone could shed some light on this for me: In the CFA EOC questions in Equity p.683, question 15 asks you to value you the intangible assets using the excess earnings method. The answer says that after you’ve worked out the residual income, you divide by r-g. In the text in the chapter, p655, it says that after you work out the RI, you multiply it by (1+g) before dividing it by r-g. Which way? Why the difference?!
intangibles growth rate should be given use 1+g