标题: Justified Price to Book [打印本页] 作者: lunarfollies 时间: 2011-7-13 13:24 标题: Justified Price to Book
Quick question for anyone who may a know to rationalize this.
One way to get the justified P/B is:
ROE - g
______
r - g
I just can't wrap my head around how you can make any determinations about book value of a firm just using ROE, growth rate and Required Return. Am I thinking about this wrong?
Thanks in advance to anyone who can help me out with this one.作者: huangxiaoxie 时间: 2011-7-13 13:24
have you done any of the residual income chapter work? book value equity * ROE = net income ? subtract required return and get the RI? this should be directly connected to P/BV and make sense.作者: economicz 时间: 2011-7-13 13:24
There was a Schweser Vol 1 question related to deriving this formula, but i can't remember where...
