I put 833 down based on the market value of 4000, but then during the break went back and thought ‘Well, I should’ve used the 4276 I got in the first question’ which then gets 1109. If it was 833 then that balances one out of the other 45 I got wrong…
where does 4127 come from? I thought it’s 4276.
chaucy1999 Wrote: ------------------------------------------------------- > where does 4127 come from? I thought it’s 4276. I might have remembered incorrectly. What about #2? is it 17.2% or 15.2% or something else? I had thought it was 17.2%, but that’s using the given historical MRP which shouldn’t be the case. But I forgot the formula for calculating the real MRP(which was asked in #3). Most likely I screwed up these two completely.
It was 883, all the othr numbers were way too high, even if you took an E®(1+g).
does anyone remember 667 being an option?
667 was one of the options and the correct answer. There were multiple exams i think.
In North America, the smallest option is 833.
Well on some question in North America 667 was an option for some question about the PVGO, maybe I am just crazy.
Wasn’t the cost of equity 11.2%?
agree in north america there was 667…in SF we got that as the lowest option for PVGO…but maybe i’m just mixed up…either way it was the lowest # and choice A i believe.
it was market stock price less E/r. let’s leave it at that. it was straightforward.
N/M I was thinking of something else. Was a question what is the sustainable growth rate? They said in the passage that the long term payout ratio was 0.6. So would it just be the ROE * b?
i think i got 833 too… but i forgot… who cares the exam is over 
I don’t remember the exact answer. But i know that you use E(0) and not e(1). PVGO has the assumption that g=0. See the following thread for an explanation. http://www.analystforum.com/phorums/read.php?12,529481,534854
Yes. It is basically P0 = no-growth value per share + PVGO. There is an example for this in CFAI book 4, page 308. Current earning is used. I think I am addicted to this. It is four days since exam. Why am I still doing this?
quant17 Wrote: ------------------------------------------------------- > I put 833 down based on the market value of 4000, > but then during the break went back and thought > ‘Well, I should’ve used the 4276 I got in the > first question’ which then gets 1109. > > If it was 833 then that balances one out of the > other 45 I got wrong… quant17 - I did the same as you. If the PVGO is measuring the growth opportunities then one should use the PV that takes into account such growth in the future… I guess one can argue that market value reflects growth opportunities, but is not as clear as to which ones… The question should have had a value to assume… Thoughts?
My initial reaction was to use the market information given opposed to using the individual forecast, but again I’m not sure what the questions were like leading up to that point. If you sat there and looked for linkages between questions, you would probably go back to using the answer you circled for the first question. Very tricky. Also, random question for nattyg, but I take it you work in the energy markets. Trade?
sustainable growth I think it was 4.48% or 4.5% was the answer.
mark@dirtbags Wrote: ------------------------------------------------------- > sustainable growth > > I think it was 4.48% or 4.5% was the answer. What is this about? The 6th question?
mark@dirtbags Wrote: ------------------------------------------------------- > sustainable growth > > I think it was 4.48% or 4.5% was the answer. thought this was 3.8