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Basic Question 3 of 3
The fundamental determinants of residual income are:
II. P/E.
III. The present value of future profits.
IV. Book value of equity.
V. Terminal value.
I. P/B.
II. P/E.
III. The present value of future profits.
IV. Book value of equity.
V. Terminal value.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate the implied growth rate in residual income, given the market price-to-book ratio and an estimate of the required rate of return on equity;
CFA® 2026 Level II Curriculum, Volume 4, Module 24.