17. Having completed the revised analysis, which gives TSM greater credit for its patented technology, the analyst realizes that the changes warrant an additional adjustment.

Although she generally employs a 20-year time frame when implementing the multistage residual income model, she believes that TSM’s ROE will remain at 20 percent through 2023 before fading toward the cost of equity capital. (Recall she is now using a persistence parameter of 0.90.) How does this extension of the period with above-normal ROE alter her valuation of TSM?