ROE and theoretical P/B scenarios
If long-term ROE stays stable, how does the cost of equity affect a reasonable P/B assumption?
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Sample JSON
Specification JSON
Sample as of
0700.HK Tencent Holdings | Hang Seng Index | 2025-10-16 – 2026-10-16 | HKD
- Highest item: High cost of equity
- 3.79 x
- Lowest item: Low cost of equity
- 1.33 x
- Average
- 2.39 x
- Number of items
- 5 items
Theoretical P/B matrix
Theoretical P/B (x) (Matrix)
Current P/B
Long-term ROE (%) (Bar)
Steady-state assumptions
Theoretical P/B (x) and Long-term ROE (%) (Table)
Sample data rows
| Long-term ROE (%) | Theoretical P/B (x) | Long-term ROE (%) | Data date (sample) |
|---|---|---|---|
| Low ROE | 2.84 | 14.42 | 2026-10-16 |
| Medium ROE | 1.78 | 15.51 | 2026-10-16 |
| High ROE | 2.19 | 5.28 | 2026-10-16 |
| Low cost of equity | 1.33 | 4.93 | 2026-10-16 |
| High cost of equity | 3.79 | 13.45 | 2026-10-16 |