5% is the geometric mean return, the Samuelson share formula uses the arithmetic mean on the numerator (see here. So the correct formula is (5% + 0.16^2/2)/(0.16^2 * 1) = 2.45.
Oh, thanks, I was under the mistaken impression that the Samuelson share formula used the geometric mean!
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5% is the geometric mean return, the Samuelson share formula uses the arithmetic mean on the numerator (see here. So the correct formula is (5% + 0.16^2/2)/(0.16^2 * 1) = 2.45.
Oh, thanks, I was under the mistaken impression that the Samuelson share formula used the geometric mean!