Guys, the Yardeni Explanation states:
P/E = 1/ (CBY - b x LTEG)
In the curriculum it states that b measures the weight the market gives to five year earnings projections.
Can someone explain the intuition here? Is it saying that that is the portion that is explained by the market and not the actual company being evaluated?
I’ve seen the Yardeni model in Level III for the P/E ratio of the market as a whole, but not for a specific company, and not at Level II.
Is it in the current Level II curriculum, and for an individual company?
Yes it is… Actually it isn’t for a specific company but for companies… there are a few examples in the curriculum.
I don’t ever remember coming across this. Was this in the CFA books by any chance? I don’t remember seeing this in Schweser.
i have not seen this in schweser.
But i was forced to learn this formula in my MBA.
b=.1 ,generally
CBY=Bond yield
LTEG=long term growth rate for say 5 years.
I am quite sure Yardini isnt there in schweser. and I am not even interested to know 
. I already have a lot to do than this.
What does this measure?
It is a way to measure that the higher the corporate bond yields result in a lower justified P/E and higher expected long term growth results in a higher justified P/E.
but is this in our syllabus for CFA l2??
we dont need to know this crap guys stop worrying
hahaha… not here to scare you. It is in the curriculum, not Schweser. I have chosen to ignore it as well. It just scared me when I saw it.