Query on Justified Book Value (CFA mock exam)

  1. Note that BTP’s return on equity (ROE) is much higher than its peers. Therefore, on the basis of justified P/B, BTP will appear overvalued relative to its peers with the same P/B.

The mock exam reflects this as wrong. Any idea why this is so? After all if the ROE increases than justified p/B which is ROE-g / r-g will increase, right?

they have the same P/B, and BTP has a higer ROE, what about r and g?