impliedPEbyYardeniModel {stockAnalyst} | R Documentation |
Calculates Price-to-Earnings Multiple by Yardeni Model that incorporates the impact of long-term expected growth rate of earnings on PE.
Description
The Long-term Earning Growth Model given by Yardeni in 2000 (as cited in Jerald E. Pinto, 2020) incorporates the expected growth rate in earnings, a variable that is missing in the Fed Model. This model is known as Yardeni Model and it incorporates the impact of long-term expected growth rate of earnings on PE and thereby overcomes the issue that was limitation of the US FED Model (Jerald E. Pinto, 2020).
Usage
impliedPEbyYardeniModel(CBY, b, LTEG, residualVal)
Arguments
CBY |
number. |
b |
number. |
LTEG |
number. |
residualVal |
number. |
Details
According to information provided by Jerald E. Pinto (2020), the method impliedPEbyYardeniModel
is developed for computing Price to Earnings Multiple by Yardeni Model that that incorporates the expected growth rate of earnings for values passed to its four arguments. Here, CBY
is corporate bond yield, b
is given coefficient of LTEG.The coefficient b
measures the weight the market gives to five- year earnings projections, LTEG
is Long Term Earning Growth.LTEG is taken as the consensus five- year earnings growth rate forecast for the market index and residualVal
is residual value of the estimator that tends to zero.
Value
Input values to four arguments CBY
b
, LTEG
,and residualVal
.
Author(s)
MaheshP Kumar, maheshparamjitkumar@gmail.com
Examples
impliedPEbyYardeniModel(CBY=0.06,b=0.2,LTEG=0.025,residualVal=0)