Hi everybody, just wondering if Return on equity is totally a different concept than cost of equity. Is it common for people to mistakenly call cost of equity a ROE? I am having a debate with a coworker on how info should be interpreted. Basically a target for company A was set using a estimated CAPM model. The target states that based on the CAPM model the “return on equity” should be 10%. The co worker wants to evaluate whether or not this target was met by doing the roe calculation (net income/average equity). I am telling him this does not make sense as they are separate measures. Am I wrong in saying this?
Submitted March 07, 2018 at 08:58AM by SerbHP http://ift.tt/2D8NKEU
