4. An analyst presents you with the following pro forma (in millions of dollars) that gives her forecast of earnings and dividends for 2007-2011. She asks you to value the 1380 million shares outstanding at the end of 2006, when common shareholders' equity stood at $4310 million. Use a required return for equity of 10% for your calculations. Earnings Dividends 2007E 388 115 2008E 570 160 2009E 2010E 599 629 2011E 660.4 349 367 385.4 a) Forecast book value, return on common equity (ROCE), and residual earnings for each of the years 2007-2011. b) Forecast growth rates for book value and growth in residual earnings for each of the years 2008-2011. c) Calculate the per share value of the equity from this pro forma. d) What is the premium over book value given by your calculation? What is the P/B ratio?