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1. Provide a table illustrating the increments to book value by year until the terminal year and find the value of shares based on RIM,
1. Provide a table illustrating the increments to book value by year until the terminal year and find the value of shares based on RIM, assuming the following information for your firm: Cost of equity capital is 12% and current book value is $15 per share ROE is assumed to be 21% for three years and 16% thereafter All earnings will be reinvested indefinitely Premium over book value will be 30% after the initial ROE period . 1. Provide a table illustrating the increments to book value by year until the terminal year and find the value of shares based on RIM, assuming the following information for your firm: Cost of equity capital is 12% and current book value is $15 per share ROE is assumed to be 21% for three years and 16% thereafter All earnings will be reinvested indefinitely Premium over book value will be 30% after the initial ROE period
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