标题: RI question [打印本页] 作者: HuskyGrad2010 时间: 2011-7-13 14:54 标题: RI question
Stmt1: RI is positive and continues at the same level year after year
Stmt2: As ROE = r, RI tends to zero
Stmt3: RI growth declines over time and eventually reaches zero.
Which of the statements is least accurate.
According to me it is 1 but answer says 3.作者: cv4cfa 时间: 2011-7-13 14:54
3 is correct. Usually as a company matures or is in a mature industry its ROE returns to its expected rate of return , gradually . At this point it is only making enough to satisfy the rate of return of the equity investors and has no residual income .作者: yospaghetti 时间: 2011-7-13 14:54
RI declines over time and eventually reaches zero. (not RI growth)
