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Case 1 Case 2 (RoE increase) Case 3 (RoE decrease) Case 4 (RoE = r)

RoE 10% 20% 5% 30%


b (Plowback ratio) 60% 60% 60% 60%
BVPS 100 100 100 100
r 30% 30% 30% 30%
P/B 0.166667 0.444444444444444 0.0740740740740741 1

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