1. The TJX Companies is a Fortune 200 company with 3,860 stores worldwide under half a dozen retail brand names, including clothing stores such as TJ Maxx and Marshalls. The TJX Companies have fiscal year (FY) that ends in January of each year. The following are TJXs historical (A) and estimated (E) earnings per share (EPS) and dividend per share (DPS). The book value per share of TJX at the beginning of FY 2018 was $3.50.

	FY 2018A	FY 2019A	FY 2020E	FY 2021E	FY 2022E
EPS	2.07	2.43	2.61	2.82	3.04
DPS	0.59	0.73	0.88	1.02	1.18

Assume that TJX has an equity cost of capital of 10 percent per annum and there are no additional shareholder equity transactions.

A. Calculate the ending book value per share for FY 2018 - FY 2022. (2 points)

B. Calculate the return on common equity percentage (ROCE) plus the residual earnings (RE) per share for FY 2018 FY 2022. (3 points)

C. Calculate the year over year (YOY) forecasted growth rates in TJXs residual earnings (RE) growth rates for the period FY 2018 FY 2022. (2 points)

D. Based on your answer in 1C above, in a residual income valuation model would you expect the continuing value to be Case 1, Case 2 or Case 3? Explain briefly. (3 points)