My questions specifically pertains to the 2014 AM Mock’s Alahtab Case Study (Equity)
The first question asks us to calculate the value of equity via GGM. For sustainable growth rate, the answer uses g = ROE * b. My problem is that the solution says that ROE = NI / ending equity rather than using the formula ROE = NI / average equity. Moreover, the passage does NOT provide any directives of using ending balance sheet figures.
Assuming no explicit instructions are provided, I was wondering would it be better to use the average values or the ending values of balance sheet figures