Question: 16. In the above analysis, the analyst uses the multistage residual income model and assumes that TSMs ROE will fade toward the cost of equity

16. In the above analysis, the analyst uses the multistage residual income model and assumes that TSM’s ROE will fade toward the cost of equity capital after 2022. How would her conclusion about TSM’s valuation change if she believed that the persistence parameter for this company should be 0.90 (rather than 0.60) because of patent protection for some of TSM’s technology?

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