[Ashvin5]

Hi John,

Thank you for your prompt answer. Haha well the reason they didn’t explain is because they didn’t know either, they were just doing as told.

Just to confirm: the market value of the shares is going to increase which will make the current actual return fall to that expected as calculated by the equity beta.

However, the ROE being an accounting measure will not necessarily reflect that since the ROE is calculated on book values of equity, right?

[Author]

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