Apply the Residual Earnings Model (Ch-5) to the data below to estimate the Stock Value Discount rate is >> 11.50% 1) 12Pls Assume Residual Earnings for Year tu4 and later remains constant amount at the te3 level you calculated (90) 2) 6pts What's new Stock $ estimate if now starting at Yr 4. Resid. Eams remains at repeat constant annual > $ 2.50 3) 6pts What's new Stock 5 estimate if now starting at Yr 4. Resid. Eams grows from t =3 $ level at constant 3.75% Current Forecast Forecast Forecast Forecast Exam-2 due Oct 31 Actual t=1 t=2 t=3 EARINGS PER SHR $ 6.25 $ 7.20$ 8.00 $ 9.00 DIVIDEND $ 2.00 $ 2.15$ 1.85$ 2.00 BOOK VALUE $ 57.00 $ 62.05 $ 68.20 S 75.20 RET ON EQUITY Calc%???> 2 ? ? 0.1150 $ Answ #2 Part 3 Annual growth after t=3 => 3.75% Stk Value incl growing CV> s Answ3 Apply the Residual Earnings Model (Ch-5) to the data below to estimate the Stock Value Discount rate is >> 11.50% 1) 12Pls Assume Residual Earnings for Year tu4 and later remains constant amount at the te3 level you calculated (90) 2) 6pts What's new Stock $ estimate if now starting at Yr 4. Resid. Eams remains at repeat constant annual > $ 2.50 3) 6pts What's new Stock 5 estimate if now starting at Yr 4. Resid. Eams grows from t =3 $ level at constant 3.75% Current Forecast Forecast Forecast Forecast Exam-2 due Oct 31 Actual t=1 t=2 t=3 EARINGS PER SHR $ 6.25 $ 7.20$ 8.00 $ 9.00 DIVIDEND $ 2.00 $ 2.15$ 1.85$ 2.00 BOOK VALUE $ 57.00 $ 62.05 $ 68.20 S 75.20 RET ON EQUITY Calc%???> 2 ? ? 0.1150 $ Answ #2 Part 3 Annual growth after t=3 => 3.75% Stk Value incl growing CV> s Answ3