Question
Calculate the estimated value per share using the Change in Residual Earnings Method : Complete the chart: N 0 1 2 3 2010 2011 2012
Calculate the estimated value per share using the Change in Residual Earnings Method: Complete the chart:
N 0 1 2 3
2010 2011 2012 2013 2014
EPS $3.00 $3.60 $4.10 $5.50
DPS .25 .25 .30 .35
Difference
BPS $15.00
ROCE
Residual Earnings
Change in RE
PV Change RE
PV of CV
Total
Capitalized VPS
________________________________________________________________________
Show RE Calculation: below
RE 2011:
RE 2012:
RE 2013:
RE 2014:
_________________________________________________________________________
The required return is 8% and the growth rate is 2.5% after 2014.
CV uses the (1+ g) adjustment
- Complete the Table:
- Calculate Value per Share using the change in residual earnings model:
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
4th edition
78025524, 978-0078025525
