没有太理解答案的解释

问题如下：

Ioana Matei directs research analyst Teresa Pereira to investigate the earnings quality of Miland Communications and Globales, Inc. Pereira compares Globales, Inc.’s financial statements with those of an industry competitor. Both firms have similar, above-average returns on equity (ROE), although Globales has a higher cash flow component of earnings. Pereira applies the mean reversion principle in her forecasts of the two firms’ future ROE.

Pereira should forecast that the ROE for Globales is likely to decline:

选项：

A.

more slowly than that of the industry competitor.

B.

at the same rate as the industry competitor.

C.

more rapidly than that of the industry competitor.

解释：

Based on the principle of mean reversion, the high ROE for both firms should revert towards the mean. Globales has a higher cash flow component to its return than the peer firm, however, so its high return on common equity should persist longer than that of the peer firm. The peer firm has a higher accruals component, so it is likely to revert more quickly.