Reinvested Return on Equity

Reinvested Return on Equity: is a way to project the future value of a company based on ROE, dividend cover, the risk-free rate of return, and the internal rate of return.

To simplify this rather complex mathematical formula, we have provided below the Prof Sage Short Version of what we call Intrinsic Value. Intrinsic Value is not the same as Reinvested Return on Equity, but the concept is very similar. The best way to learn the Intrinsic Value calculation is by real examples with listed companies, and we provide an example using People’s Food below. It is important to remember that Intrinsic Value is an approximation and cannot be expected to predict the exact value of a business in future years.