In this ii, while finding PE ratio we used 133.57 which is expected market price.
Because for D1/Re-g answer comes 1 period before?
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
P/E ratio here is the trailing P/E ratio which is P0/E0. P0 has been calculated by PV of future incomes(2015-2017, 2017 to infinity) . E0 is already given in the question.
Sir
Then can’t we take 93÷9.6 ?
So, if you read the question well they have asked to find the P/E ratio using D/D valuation model which is DDM , whereby P0= D1/Ke-g and we have arrived at the value of P0 (expected share price) in the first working = 133.57 so we will use it.
The solution according to me has an error as it states P/E = P1/E0 (it is P0/E0)