Inverse of PE vs CoE vs RoE vs Lev IRR
I came across an old thread where one guy was asked this question. Nobody answered so I thought I would start a new thread. This is how I think of these things and what they mean.
Inverse of PE - sellers yield meaning how much return as a stock owner can you expect on the equity relative to its current price in the market. How much return are you getting
Cost of Equity (Re) - cost of issuing that stock for the company itself (HOW MUcH return should you actually be expecting) . This is market based and only relevant for companies that are operating publicly
RoE - how effectively is the company utilizing its equity
Levered IRR - the return that I’d expect for investing in the equity of the company that was private.
thoughts? Agree or disagree?
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