Effective RoE is basically Earnings yield…I have to pay ₹7890/- per share & get ₹207 per share in Earnings…so ₹207/₹7890 is the calculation
Yes retention ratio is retained earnings %. SGR is retention ratio * ROE…A company can grow its earnings by how much current earnings it is able to reinvest in the business and earn the same ROE…
Sir Two questions if you want to answer 1)how have you calculated effective ROE ?
2) Is retention ratio obtained from retained earnings and how have you calculated sustainable growth rate from roe and retention ratio?
Thanks for sharing a wonderful analysis.
Thanks for your comments and question…
Effective RoE is basically Earnings yield…I have to pay ₹7890/- per share & get ₹207 per share in Earnings…so ₹207/₹7890 is the calculation
Yes retention ratio is retained earnings %. SGR is retention ratio * ROE…A company can grow its earnings by how much current earnings it is able to reinvest in the business and earn the same ROE…