Archive: September 2016

Bank Stocks Driven by the Spread between ROE and COE

The major bull market in bank stocks (KBW Index) from the 1st quarter of 1995 to year end 2006 of 300% was driven by the widening spread between bank return on equity (ROE*) and the cost of equity (COE**), as defined by IDC Financial Publishing, Inc. (IDC).  During the 12…

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