See how our partners can help you ace your CFA exams.
Deriving justified P/E expressions
I must be doing something algebraically wrong here but I can't figure out how the justified P/E is derived.
Could someone explain how we get to the following expressions:
The CFA institute lists both expressions as:
Leading P0/E1 = (D1/E1)/(r-g)
Trailing P0/E0 = [D0(1+g)/E0]/(r-g)
Thanks
1 ·