Loss Given Default and Return on equity: Difference between pages

Revision as of 14:13, 25 June 2016

(ROE).

A measure of how much profit is enjoyed (or expected to be enjoyed) by equity investors, compared to the book value of the equity investment made.

Profit is measured as profit after tax.

ROE is calculated as:

Profit after tax / (book value of equity)

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-(LGD).
+(ROE).
-Loss Given Default is the estimated loss on an exposure - usually expressed as a percentage - following a default by the counterparty.
+A measure of how much profit is enjoyed (or expected to be enjoyed) by equity investors, compared to the book value of the equity investment made.
-The relevant measure of the exposure is Exposure at Default (EAD).
+Profit is measured as profit after tax.
+ROE is calculated as:
+Profit after tax / (book value of equity)
 == See also ==
+* [[Book value]]
+* [[Equity]]
+* [[Profit after tax]]
+* [[Return on capital employed]]
+* [[Return on investment]]
-* [[Credit rating]]
+[[Category:Corporate_finance]]
-* [[Default]]
-* [[Expected loss]]
-* [[Exposure At Default]]
-* [[Probability of Default]]