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From |
"Nick Cox" <n.j.cox@durham.ac.uk> |

To |
<statalist@hsphsun2.harvard.edu> |

Subject |
st: RE: Solving equations iteratively |

Date |
Wed, 5 May 2010 17:15:18 +0100 |

At first sight this looks similar to your posting on 20 April. There were excellent suggestions in reply from Stas Kolenikov, Al Feiveson and Austin Nichols. It is not clear why this is re-posted as if it were a fresh question. Any way, careful study of the answers in the archives will show that Mata is not only the only strategy. Nick n.j.cox@durham.ac.uk David Scheuer I am stuck in a problem. In order to rebuild cost of capital models, which determine cost of capital implied as the internal rate of return from a valuation model, I need to solve equations iteratively. For instance, this is the first (of 30) row in my dataset and I want to find r_CT in every row by solving the following equation. p_0 = 27.09 bv_0 = 18.02 eps_1 = 2.72 eps_2 = 2.94 eps_3 = 3.32 eps_4 = 3.96 eps_5 = 3.24 bv_1 = 19.38 bv_2 = 20.85 bv_3 = 22.51 bv_4 = 24.49 g_CT = .0125 r_CT = . p_0=bv_0+(eps_1-r_CT*bv_0)/(1+r_CT)+(eps_2-r_CT*bv_1)/(1+r_CT)^2+(eps_3- r_CT*bv_2)/(1+r_CT)^3+(eps_4-r_CT*bv_3)/(1+r_CT)^4+((eps_5-r_CT*bv_4)*(1 +g_CT))/((r_CT-g_CT)*(1+r_CT)^4 , where only r_CT is an unknown variable. I know that it should be between 0 and 1 because it is an interest rate. I guess I have to write a program in mata but I am not quite familiar with the syntax yet. * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**References**:**st: Solving equations iteratively***From:*"David Scheuer" <david.scheuer@gmx.de>

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