University of Virginia GMO the Value versus Growth Dilemma Case Questions
University of Virginia GMO the Value versus Growth Dilemma Case Questions
Based on the reading,
1. What is value investing and growth investing? What are the differences and relative merits? (200-250 word)
2. What are the GMO’s main arguments in favor of valuing investing? (200-250 word)
3. Estimate the real risk-adjusted long-term expected return for CVS.
– Value of “14” as the terminal year (2009) P/E Ratio
– Use the 10 year as the long term holding period.
– The case uses 30 years treasury yield (6.1%) as the annualized expected risk free rate.
– The case uses 2% as the annualized expected inflation rate for 10 years