- The dividend yield will be 1.95%.
- Shares outstanding will decline 1.00%.
- The long-term inflation rate will be 1.75% per year.
- An expansion rate for P/E multiples will be 0.15% per year.
- The long-term corporate earnings growth premium will be 1% above expected real GDP growth.
- Expected real GDP growth will be 2.5% per year.
- The risk-free rate will be 2.0%.

The problem asked to calculate the equity returns using the Grinold Kroner method.

I got 7.35%. While the answer according to the CFA 8.35%

For expected earnings growth, I used 2.5% +1.75% while the CFA added also the 1%, but my logic was not to add the 1% because a company cannot grow more than the economy on the long term.