How to derive P/B = (ROE-g) / (r-g) from Gordon Growth Model and g=b*ROE? Thanks.
See above thread.
Key steps are Earnings = E = B*ROE Divs = E(1-b) = B*ROE*(1-b) substitute into GGM and divide both sides by B
How to derive P/B = (ROE-g) / (r-g) from Gordon Growth Model and g=b*ROE? Thanks.
See above thread.
Key steps are Earnings = E = B*ROE Divs = E(1-b) = B*ROE*(1-b) substitute into GGM and divide both sides by B