Question
ABC Inc. made $1.00 net income per share last year and paid out $.30 in dividend. The company had a book value (or equity) per
ABC Inc. made $1.00 net income per share last year and paid out $.30 in dividend. The company had a book value (or equity) per share of $10. The required rate of return is 12% for the stock.
Questions;
Whats the companys ROE?
Whats the residual income last year?
Calculate the stock price based on Residual Income Model.
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Analysis For Financial Management
Authors: Robert C Higgins
8th International Edition
0071257063, 9780071257060
