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residual income

Module 32.4 LOS 32.h: Residual Income Forecasting with a Persistence Factor

April 30, 2019 by CFA Study Guide
CFA Equity

The challenge of using residual income models is that we must forecast residual income indefinitely into the future. However, by …

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Module 32.2 LOS 32.c: Residual Income Forecasting

April 30, 2019 by CFA Study Guide
CFA Equity

We can use the following equation to forecast the residual income: RIt = Et − (r × Bt − 1) = (ROE …

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Module 32.2 LOS 32.d: Fundamental determinants of Residual Income

April 30, 2019 by CFA Study Guide
CFA Equity

Using a single-stage residual income model, we can highlight the fundamental drivers of residual income. We can equate B0 to …

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Module 20.3 LOS 20.i: Economic profit, residual income, and claims valuation models

April 30, 2019 by CFA Study Guide
CFA Corporate Finance

Economic profit is a measure of profit in excess of the dollar cost of capital invested in a project: EP = …

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