Chartered Financial Analyst Level 2
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A company's ROE is expected to fade toward its cost of equity as competitors enter the industry. When using a multistage residual income model to value the company, an analyst should most likely expect the:
A company's ROE is expected to fade toward its cost of equity as competitors enter the industry. When using a multistage residual income model to value the company, an analyst should most likely expect the:
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A
persistence factor to be equal to one.
B
continuing residual income to approach zero.
C
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