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I would like to know that when using the BSOp model to value a company , the value of Pe is calculated as
300×1.08^-5(power of negative 5)
OR
300×1.08^5 (power of positive 5)Thank you.
There is no specific formula for calculating Pe. How it is arrived at depends on the information in the question.
You will have to refer to a specific past exam question for me to give you a proper answer.- Topics: 0
- Replies: 3
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I have just done this Question (I think AggroChem, J10?)
In this particular example there is $3m 5yr floating rate loan… at yield rate plus 3% where the current yield is 5% (Which is where the 0.08 bit comes from)
To calculate PV in 5 years you need to use your PV Table… Or alternatively use the formula on the top of the table… (1+r)^(-n)
Hope this helps 🙂
That i know using the negative and positive.
But i dont get it why do they do ^5 positive here then.
Please explain amd check this out from the Kaplan Text book.
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