Booker, Inc. is a distributor of building supplies. Management for the company has developed the following forecasts of net income:

	Forecasted
Year	Net Income
2011	$111,432
2012	$131,490
2013	$156,473
2014	$178,379
2015	$199,784

Management expects net income to grow at a rate of 7 percent per year after 2015 and the company's cost of equity capital is 14%. Management has set a dividend payout ratio equal to 25% of net income and plans to continue this policy. Bookers common shareholders' equity at January 1, 2011 is $544,902.

Required:

a.	Using the residual income model, compute the value of Booker as of January 1, 2011.
b.	Using the dividend discount model, compute the value of Booker as of January 1, 2011.