Differentiate normal forward p-e and the normal trailing p-e

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Question: 1. The historical earnings growth rate for the S&P 500 companies has been about 8.5 percent. Yet the required growth rat e for equity investors is considered to be about 10 percent. Can you explain the in consistency?

2. The normal forward P/E and the normal trailing P/E always differ by 1.0. Explain why.

Reference no: EM131487814

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