ayodayo

pfcfaataf Wrote:
-------------------------------------------------------
> ROE = E1/BV0
>
> BV1 = BV0 + E1x(1-b) = B0 x (1+g)
>
> return on equity, the equity that was available at
> the beginning to produce earnings at the end of
> the year.

one correction, I switched meaning of b and 1-b in my head (temporarily I hope)

g = b x ROE and ROE stays defined as before ROE = E1/BV0

so

BV1 = BV0 + E1 x b = B0 x (1+g)