deletions | additions       diff --git a/section_textit_DDM_textit_RIM__.tex b/section_textit_DDM_textit_RIM__.tex  index 62b772d..e9cdee0 100644  --- a/section_textit_DDM_textit_RIM__.tex  +++ b/section_textit_DDM_textit_RIM__.tex 
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dividends will grow at a constant rate, duration of equity is infinite so that terminal value  is negligeable:  \begin{equation}  P_{t}=\displaystyle\sum_{i=1}^{\infty}\frac{D_{t+i}}{(1+R)^i}\approx\frac{D_{1}}{R-g} P_{t}=\displaystyle\sum_{i=1}^{\infty}\frac{D_{t+i}}{(1+R)^i}\approx\frac{D_{t+1}}{R-g}  \end{equation}  where $g$ is the expected constant dividend growth rate to perpetuity.This equation highlights  the fact that future returns are driven by the current valuation and future growth. 
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returns as long as the \textit{ROE} also increases. Moreover given two companies with the same  \textit{ROE} but different \textit{PB}s, the higher \textit{PB} will either have a lower discount rate $R$ and/or have  a higher persistence rate $\omega$ (ability to generate more abnormal earnings). There is a clear  similarity between the \textit{PB-ROE} model and the Gordon Growth Model (\textit{GGM}). (\textit{GGM}) (Equ. 3).  Recall that the \textit{GGM} is : \begin{equation}  P_{t}=\frac{D_{t+1}}{(R-g)} P_{t}=\frac{D_{t+1}}{R-g}  \end{equation}  Or,  \begin{equation}  P_{t}=\frac{\rho E_{t+1}}{(R-g} E_{t+1}}{R-g}  \end{equation}  Where $\rho$ is the payout ratio.  The \textit{GGM}