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At the beginning of 2017, investors had invested $25,000 of common equity in Grant Corp. and expected to earn 11% per year. Forecasts of Grant's
At the beginning of 2017, investors had invested $25,000 of common equity in Grant Corp. and expected to earn 11% per year. Forecasts of Grant's net income are as follows:
2017: $ 3,500
2018: $ 3,500
2019: $ 2,900
Use the information above to compute Grant Corp's expected residual income for the year 2019, but assume that Grant pays zero dividends in 2017 and 2018.
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