标题: Persistence factor [打印本页]

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作者: Andreas42    时间: 2011-7-13 13:11     标题: Persistence factor

Pg 278, Study session 12 of Schweser book.
Low persistence factor associated with High ROE.

Shouldn't this be low persistence factor associated with Low ROE?

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作者: chaojimali    时间: 2011-7-13 13:11

because of competition>>> wil enter to the maket >> LARGE ROE will cause competition>>



Edited 1 time(s). Last edit at Wednesday, May 25, 2011 at 03:00AM by meshal.

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作者: cv4cfa    时间: 2011-7-13 13:11

another way to think might be:

in Residual income,

present value of continuing income=(ROE-r) x BV / (1+r-w)

r = required return on equity
w = persistent factor

if w gets larger, present value of residual income get bigger. hence bigger residual income, bigger return on euity.

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