Dear all,

I have a rapid question about ROE, I was rechecking my Equites notes, and I dont know it is maybe because the exam is so close this moment or I’m just losing my mind at this point, but in the Residual Income the formula to get the V is : B_{0} + Σ E_{t} - rB_{t-1}/(1+r)^{t} , and this formula can be written as B_{0} + Σ ROE - r (B_{t-1})/(1+r) , so this is my question, ROE_{t} is always E_{t}/B_{0} or just in this case we take E_{t}/B_{t-1} ,(time - 1, the book value of the prior period), thank you very much and good luck this saturday!!!

Gabriel