Corporate Valuation: Calculating Forecast P/E Ratios
Interactive

Corporate Valuation: Calculating Forecast P/E Ratios

Intuition Publishing
Updated Sep 24, 2020

We can calculate a forecast price/earnings ratio by reformulating the dividend discount model. By amending the model inputs of dividend payout, cost of equity, and the growth rate we can the seen the effect on the forecast P/E. Here we look at the calculation of the forecast P/E ratio and the impact on the ratio of changing model inputs.