The following formula is of ten used to value shares, where Earn, is forward earnings, r is

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The following formula is of ten used to value shares, where Earn, is forward earnings, r is the cost of capital, and g is the expected earnings growth rate.
Value of equity = Eam1/r – g
Explain why this formula can lead to errors.

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Financial statements

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Authors: Stephen Barrad

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Question Posted: Mar 17, 2012 06:17 AM

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The following formula is of ten used to value shares, where Earn, is forward earnings, r is

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This formula capitalizes earnings at the exdividend earnin...View the full answer

Financial statements

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