Accountancy, asked by saitejaabc2929, 11 months ago

Difference between return on equity and required rate of return when there is no growth modal

Answers

Answered by gauravarduino

13

Explanation:

If its ROE is greater than the required rate of return, then its PVGO exceeds zero, and the stock price will increase if the company reinvests some of its earnings for further growth. ... If PVGO is negative, then the company will still grow, but its overall ROE will decline, and with it, its stock price.

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