ROE and the persistence factor (w)

CFA Level II
#1

How does a HIGH ROE justify a LOW (w)? isn’t a company with a high ROE considered competitive and thus sould have a higher w?

#2

This was dicussed yesterday. Try to run a search and see if you come up with it. If not I am sure everybody will jump in and help.

#3

Did you find it Usif?

#4

I didn’t see the discussion but I assume high ROE has low persistence factor because high returns cause more competitors enter the market.

#5

That was the basic discussion, but it was bounced around a little.

#6

Here is the thread Usif. http://www.analystforum.com/phorums/read.php?12,727411

#7

Hey mwvt9… thanks buddy :slight_smile:

#8

Sure.