BEC Study Group Q4 2018 - Page 7

Viewing 8 replies - 91 through 98 (of 98 total)
1 2 3 … 5 6 7
  • Author
    Replies
  • November 29, 2018 at 5:48 am #2082077
    jeff
    Keymaster

    Sorry – this study group got un-sticked…here's to everyone making the final push in Q4! Finish strong.

    – jeff

    AUD - 79
    BEC - 80
    FAR - 76
    REG - 92
    Jeff Elliott, CPA (KS)
    NINJA CPA | NINJA CMA | NINJA CPE | Another71
    November 29, 2018 at 5:50 am #2082089
    jeff
    Keymaster

    Q1 Study Groups also open: https://www.another71.com/cpa-exam-forum/topic/bec-study-group-q1-2019/

    AUD - 79
    BEC - 80
    FAR - 76
    REG - 92
    Jeff Elliott, CPA (KS)
    NINJA CPA | NINJA CMA | NINJA CPE | Another71
    November 29, 2018 at 5:28 pm #2086128
    lam2848
    Participant

    hi guys. I'm reviewing for BEC right now and am trying to understand the price to earnings ratio. Am I correct that this ratio determines the value of equity?

    FAR - 78

    AUD - 75

    BEC - 83

    REG - 82

    November 29, 2018 at 7:54 pm #2086497
    CPAmojo
    Participant

    Hi @lam2848,

    I’m taking BEC tomorrow and this is how I understand FORWARD P/E. It doesn’t give you the value of the equity. However, the value of the equity can be calculated using the Constant Growth (Gordon) Model.

    To answer your question, think of it this way on why investors use P/E… P/E is price today divided by EPS x (1 + Growth). P/E helps investors understand the growth potential of the equity. For example, a high P/E might be good because it means the equity has growth potential. I’m not trying to confuse you but a high P/E might also mean that the stock is overvalued. It’s kind of a gamble.

    Hope this helped.

    AUD - 75
    BEC - 76
    FAR - 82
    REG - 81
    Step 1 - passing the CPA... DONE!

    Step 2 - CONQUERING THE WORLD

    November 29, 2018 at 10:06 pm #2086701
    sg235
    Participant

    Lam- A PE of 22 would mean that the stock currently sells for almost 22 times the expected earnings. Like CPAmojo said high is good for growth potential (good for the company) but lower PE means a better bargain for the buyer and due to that it is a gamble as mentioned above.
    Good luck on your exam – Cpamojo!

    AUD - 86
    BEC - 81
    FAR - 80
    REG - 80
    They were on to something when they said do it right the first time..
    November 30, 2018 at 9:39 am #2087868
    gdubb29
    Participant

    How much emphasis should I place on memorizing all of these formulas?

    November 30, 2018 at 9:51 am #2087895
    Mimeto
    Participant

    Know the main formulas (most common). In all the sims, formulas will be given to you.

    AUD - 84
    BEC - 89
    FAR - 89
    REG - 85
    Prepare for the worst, hope for the best!
    November 30, 2018 at 9:54 am #2087898
    gdubb29
    Participant

    Just asking because I'm going through the MC questions and a bunch of them in B2 Deal with formulas. Not sure how much time I should be using to memorize them or not.

  • Author
    Replies
Viewing 8 replies - 91 through 98 (of 98 total)
1 2 3 … 5 6 7
  • You must be logged in to reply to this topic.