1. Calculate the expected price for this company using a Residual Income Model. Current Book Value per share and trailing earnings are given in the 2019 column. Earnings growth and BVPS growth is based on the average ROE and average Dividend Payout Ratio over the last 4 years. Assume a required rate of return of 8%.

Use the following regression: Price_jt = 7.21 + 0.76(BVPS_jt) + 7.86(AER2_jt)

Information given in column '2019' is at time zero and also represents trailing twelve month (ttm) w. 2016 2017 2018 2019 Dividend $0.85 $0.90 $0.95 $1.00 $2.125 $2.25 $2.375 $2.50 EPS 20% ROE 19% 18% 18% P/E 26 27 26 BVPS 18 20 22 24 Sales/Share 34 36 38 FCF/Share 5 6 7 22,000 23,000 EBITDA 23,000 25,000 Debt 45,000 50,000 55,000 50,000 Cash 10,000 12,000 8,000 10,000 FCF 12,500 12,500 15,000 17,500 40 27 Information given in column '2019' is at time zero and also represents trailing twelve month (ttm) w. 2016 2017 2018 2019 Dividend $0.85 $0.90 $0.95 $1.00 $2.125 $2.25 $2.375 $2.50 EPS 20% ROE 19% 18% 18% P/E 26 27 26 BVPS 18 20 22 24 Sales/Share 34 36 38 FCF/Share 5 6 7 22,000 23,000 EBITDA 23,000 25,000 Debt 45,000 50,000 55,000 50,000 Cash 10,000 12,000 8,000 10,000 FCF 12,500 12,500 15,000 17,500 40 27