Apply the Residual Earnings Model (CH-S) to the data below to estimate the Stock Value. Discount rate is >> 10.50% 1) 10Pts Assume Residual Earnings for Year t-4 and after remains constant Samount at the te3 level you calculated ('g'=0), 2) 4 pts What's new Stock $ estimate if now starting at Yrt-4, Resid. Earns grows from t =3 5 level at constant 3.40% Current Forecast Forecast Forecast Forecast Exam-2 due Oct-29 t=0 ta1 t=2 EARINGS PER SHR S 5.00 $ 5.65$ 6.15$ 6.65 DIVIDENDS 1.50 $ 1.75 s 1.85$ 2.00 BOOK VALUE $ 46.00 $ 49.90 54.20 $ 58.85 RET ON EQUITY 0.1050 Part-1 Stock Value >> e t=4 Part 2 Annual growth after t3 => Discount Factor for PV > 3.40% 0.1050 $ $ $ ta1 5.650 $ 1.7505 49.90$ t=2 6.150 $ 1.850 S 54.20 S t=3 6.650 2.000 58.85 Value ind growing CV> Exam-2 due Oct-29 Apply the Residual Earnings Model (CH-S) to the data below to estimate the Stock Value. Discount rate is >> 10.50% 1) 10Pts Assume Residual Earnings for Year t-4 and after remains constant Samount at the te3 level you calculated ('g'=0), 2) 4 pts What's new Stock $ estimate if now starting at Yrt-4, Resid. Earns grows from t =3 5 level at constant 3.40% Current Forecast Forecast Forecast Forecast Exam-2 due Oct-29 t=0 ta1 t=2 EARINGS PER SHR S 5.00 $ 5.65$ 6.15$ 6.65 DIVIDENDS 1.50 $ 1.75 s 1.85$ 2.00 BOOK VALUE $ 46.00 $ 49.90 54.20 $ 58.85 RET ON EQUITY 0.1050 Part-1 Stock Value >> e t=4 Part 2 Annual growth after t3 => Discount Factor for PV > 3.40% 0.1050 $ $ $ ta1 5.650 $ 1.7505 49.90$ t=2 6.150 $ 1.850 S 54.20 S t=3 6.650 2.000 58.85 Value ind growing CV> Exam-2 due Oct-29