[DesertCat]

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Here is my break down for BUD:
Year Book Value Avg ROE EPS DIV % Retained New Book
Base $3.40 $2.77 $0.93 66% $5.24
Year 1 $5.24 39.97% $2.09 $0.70 66% $6.63
Year 2 $6.63 39.97% $2.65 $0.89 66% $8.39
Year 3 $8.39 39.97% $3.35 $1.13 66% $10.62
Year 4 $10.62 39.97% $4.24 $1.43 66% $13.44
Year 5 $13.44 39.97% $5.37 $1.80 66% $17.00
Year 6 $17.00 39.97% $6.80 $2.28 66% $21.52
Year 7 $21.52 39.97% $8.60 $2.89 66% $27.23
Year 8 $27.23 39.97% $10.89 $3.66 66% $34.46
Year 9 $34.46 39.97% $13.78 $4.63 66% $43.61
Year 10 $43.61 39.97% $17.43 $17.43


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I think your problem here is that BUD can't keep up a high ROE on a large book value. It's ROE is high because it's book value is low, so using ROE to estimate earnings isn't wise in this case.

Instead you should look at net earnings growth over the last 5 years or so, and extrapolate those earnings out ten years. Then make your estimates of what they'll do with those earnings (pay dividends, re-invest in co, or buy shares back), and figure out how many shares and how much EPS and book value that gives BUD in ten years.

I think Adobe is in a similar situation. Both companies have semi-mature businesses, they can't grow arbitrarily fast just by adding capital. They can get really high returns on equity because they have good pricing power and don't require a great deal of capital within their businesses.

If they try to convince twice as many people to purchase and use their products their ROE would plummet. So they have to "milk" their current business efficiently, invest in reasonable growth as the market allows, and return all remaining cash to shareholders.