Question
1. Using a Residual Income Model (RIM), where residual income grows at rate g s for n=6 years and rate g thereafter, compute the intrinsic
1. Using a Residual Income Model (RIM), where residual income grows at rate g s for n=6 years and rate g thereafter, compute the intrinsic value per share for Acme Inc. given the following information from their most recent financial statement:
| Item | Value |
| B V1 (per share) | 11.86 |
| B V 0 (per share) | 12.15 |
| N I 0 (per share) | 3.59 |
| g s | 12.38 % |
| g | 4.44 % |
| R c s | 11.28 % |
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Cases In Financial Reporting
Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally
8th Edition
1618531220, 9781618531223
