Fun Toys Co. reported a per-share book value of $3.5, earnings per share (EPS) of $2.3, and dividend per share (DPS) of 0.85 in its balance sheet on

December 31, 2010. In early 2011 analysts made the following forecasts for 2011~2015: EPS growth rate is 4.5%, and DPS growth rate is 2%. The required return for equity is 8.5% percent.

Case 1: If the residual earnings are zero after 2015, calculate the value per share at the end of 2010.

Case 2: If the residual earnings are at 2015 level for 2016 and beyond, calculate the continuing value at the end of 2015 and value per share at the end of 2010.

Case 3. If the residual earnings will grow at 4% per year for 2016 and beyond, calculate the continuing value at the end of 2015 and value per share at the end of 2010.