Apply the Residual Earnings Model (Ch-5) to the data below to estimate the Stock Value. Discount rate is >> 11.00% 1) 12Pts Assume Residual Earnings for Yeart=4 and later remains constant S amount at the ts3 level you calculated ('g'=0). 2) 6pts What's new Stock $ estimate if now starting at Yr t=4, Resid. Earns remains at repeat constant annual > $ 2.00 3) 6pts What's new Stock $ estimate if now starting at Yr t=4. Resid. Earns grows from t =3 $ level at constant> 3.00% Current Forecast Forecast Forecast Forecast Actual t=1 t=2 t = 3 EARINGS PER SHR $ 6.25 $ 7.00 $ 7.50 $ 8.20 DIVIDEND $ 2.00 $ 2.20 $ 2.35 $ 2.55 BOOK VALUE $ 56.00 $ 60.80 $ 65.95$ 71.60 Calculate %RET ON EQUITY > ? ? ? 0.1100 $ Answ #2 Part 3 Annual CV growth after t=3 => 3.00% Stk Value incl growing CV > $ Answ #3