How is the gross return requirment of 10.8% calcuated on p183 of Reading 15 for the Susan Fairfax example? Assuming real rate = 3% inflation = 4% and taxes = 35% (1.03)(1.04)/(1-.35) = 10.95 What am I missing?
Nothing… (3+4)/(1-.35) = 10.8
How is the gross return requirment of 10.8% calcuated on p183 of Reading 15 for the Susan Fairfax example? Assuming real rate = 3% inflation = 4% and taxes = 35% (1.03)(1.04)/(1-.35) = 10.95 What am I missing?
Nothing… (3+4)/(1-.35) = 10.8