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\begin{equation}  \frac{P_{t}}{B_{t}}=\frac{ROE_{t+1}-g}{R-g}  \end{equation}  The \textit{GGM} shows that the market value of equities is $PB-ROE$ relationship reflects  a trade-off between the discount rate and future growth while the \textit{RIM} shows that the market value of equities $PB-ROE$ relationship  is a trade-off between the discount rate and the persistence rate. There is, thus, a close relationship between growth  and persistence of abnormal earnings. This is very intuitive since future abnormal earnings  drive investment which in turn drives growth in dividends.Finally, the term $(ROE_{t+1}-R)$ reflects the ability for the firm to create value. Is a firm is able to create value, its \textit{PB} will be above 1.