My doubt is that since he Bradley has pegged the stock to a fair value at $28 and has confirmed a target price of $28. Why cant we use price target as a benchmark in this question ? I understand why we are using arrival price but cant we use price target also as benchmark ?
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To begin with, if you choose the Price Target as the benchmark, every cost you’ll encounter would be a negative one. The same would not be a good representation.
Secondly, IS is always calculated using the Decision Price which is a Pre Trade Benchmark.