P0 = 66 d1 = 2.4 RFR = 5.3% equity risk premium = 6% beta = 0.9 what’s P1?
70.59 ?
r=5.3+0.9(6) = 10.7% P0 = 66 = D1/(r-g) = 2.4/(.107-g) so g = 0.107 - 2.4 / 66 = 0.0706 D2 = 1.0706 * D1 = 2.57 P1 = 2.57 / (0.107-0.0706) = 70.59
k= 10.7 P0 = D1 + P1/1+k 66 = 2.4 + P1 / 1.107 66 * 1.107 = 2.4 + p1 73.06 - 2.4 = P1 70.6?
i posted this one b/c i hadn’t seen this formula before, but CFAI solves it: P0 = P1 + D1 / (1 + r)^1 66 = P1 + 2.4 / 1.107 = 66(1.107) = P1 + 2.4 P1 = 70.662 question 2 reading 41. i think both of your ways are fine and that was how i attacked it also, looking for g. answers are a few cents off of eachother.
PO = (P1 - PO + D1) / r r = 5.3 + 0.9 (0.6) = 10.7% P1 = 70.662 I like CPK’s way too…but I think we should both be getting the same answer…it is close enough.
sorry for jacking the thread…wanted to get this input from banni and cfaboston. did you guys take the L2 schweser bootcamp last year? If so, was it worth it? I did not take the boot camp from schweser for LI and took the BSAS…I enjoyed that. They mailed the slide for the bootcamp and I was just flipping through them and I am not sure how much I will get out of them, especially this late in the game. I really wish the bootcamp was this week or next week (it isn’t in boston till the may 15th weekend). any input would be helpful. are you guys taking it this year?
I didn’t take it last year and pretty sure nor Banni. I am taking it this year.
no bootcamp here. i think my time is better spent reviewing what i’m not good at, not just a general overview that late in the game. no offense schweser. i’m sure it’d be a nice review, but i need to zone in on what’s going to win me points. i got the videos instead and honestly, i think they’re pretty bad- will only get the basic schweser next year (on level 3 it better be). watched one or 2 of the videos and decided i wasn’t a fan at all. so it’s just me, the internet, you dorks, my cfai books, qbank, and practice tests from here on out. good times.
bannisja Wrote: ------------------------------------------------------- > no bootcamp here. i think my time is better spent > reviewing what i’m not good at, not just a general > overview that late in the game. no offense > schweser. i’m sure it’d be a nice review, but i > need to zone in on what’s going to win me points. > i got the videos instead and honestly, i think > they’re pretty bad- will only get the basic > schweser next year (on level 3 it better be). > watched one or 2 of the videos and decided i > wasn’t a fan at all. > so it’s just me, the internet, you dorks, my cfai > books, qbank, and practice tests from here on out. > good times. got it, thanks. I think I will just go first day and see how beneficial it is. I am just take some of my other stuff with me to review if it starts getting boring or if it is a broad overview and not granular.