"Expected ROE" = Required Return?

Y or N suffices

N. Might have more growth in the long term so required might be high and next year ROE is low

for schweser Y

cpk123 Wrote: ------------------------------------------------------- > for schweser Y haha. i thought that too. i think in theory ROE should equal r if markets are in equilibirum though so technically they are (or should be) the same.

if ROE was r then you would never have RI

also, if ROE = r, you would never have a positive franchise value because your FF = ROE - r / (roe x r) would always be zero

according to all of finance everythings always supposed to be in equilibrium and no one should be able to make any risk adjusted profits ever

the show NY Wrote: ------------------------------------------------------- > according to all of finance everythings always > supposed to be in equilibrium and no one should be > able to make any risk adjusted profits ever i hate how we’re meant to believe some of this CR^P! in long term ROE = cost of equity as abnormal profits aren’t meant to exist. though in the short term this doesn’t hold of course, hence different stages of the DDM, persistance factors in RI etc etc