Last updated on Sep 28, 2024

What are the main challenges and limitations of applying the residual income model to banks?

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The residual income model (RIM) is a popular method of estimating the intrinsic value of a company based on its future earnings and equity. However, applying RIM to banks can pose several challenges and limitations due to the unique characteristics of the banking industry. In this article, you will learn about some of these issues and how they affect the accuracy and reliability of RIM for banks.

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