How to calculate the residual earning, present value of 2003 & 2004? 

How to calculate the total present value a the end of 2002?

How to calculate the terminal value for the 3 growth scenarios?

 

Kimberly-Clark Corp (KMB) reported a book value for its 568.6 million common shares of $5,650 million on December 31, 2002. Analysts are forecasting EPS of $3.36 for 2003 and $3.60 for 2004, and the indicated dividend per share is $1.36. Accepting these forecasts as valid, and using a required equity return of 9%, deal with the following. Prepare a table of target prices at the end of 2002 and at the end of 2004, based on the following forecasts: Residual earnings will remain constant after 2004 Residual earnings will grow at 2% after 2004 Residual earnings will grow at 4% after 2004