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Consider the following information regarding Sensation Ltd, a listed company on ASX in Australia. EPS DPS Year 0 Year 1 Year 2 Book Value of

Consider the following information regarding Sensation Ltd, a listed company on ASX in Australia. EPS DPS Year 0 Year 1 Year 2 Book Value of 22.00 Share Required Equity Return Share Price on ASX 6% 23.80 1.61 1.79 0.64 0.75 Required: a) Assuming Sensation will close operations in 2 years' time, value an ordinary share in this company using the Residual Income Method. b) Is Sensation Ltd fairly valued on the ASX? Please explain fully your response

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