6) Fairfield, Inc. has $20 book value of equity per share, and shareholders require a 9% return on equity (re) for the firm's common stock. This period, the firm earned $2.00 of net income per share. Discuss the types of assumptions that you would need to make in order to create an abnormal earnings model to compute the appropriate value for a share of Fairfield stock.

6) Fairfield, Inc. has $20 book value of equity per share, and shareholders require a 9% return on equity (re) for the firm's common stock. This period, the firm earned $2.00 of net income per share. Discuss the types of assumptions that you would need to make in order to create an abnormal earnings model to compute the appropriate value for a share of Fairfield stock