So i have a question… if they were to give us a nomimal required rate of return ® and also a real r…which one should we use? In #33…i was debating if i needed to use the nomiminal or real but luckily since g came out to be 14.4% i knew i had to use nominal 15% instead of 10%.
Well didn’t the question state that the analyst decided to use a “real Valuation” approach?
Well if he did then the answer is even more weird. To get the franchise P/E they used nominal required returns. I am just asking in general (aside from just this question). Is there a general rule…or it really just depends on the state of the question. Just afraid if i see both nominal and real on the exam i’ll get confused as to which to use.
I think it is all normal unless the topic touches emerging market which would trigger my alert system