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I want a solution Question 5: The following forecasts of earnings per share (EFS) a per share of $22.00 (2019): The firm has an equity
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Question 5: The following forecasts of earnings per share (EFS) a per share of $22.00 (2019): The firm has an equity cost of capital of 10% per annum. Requirement 1: Calculate forecast of the residual earnings (per share) for each year, 2020 to 2024. (10 points) Requirement 2: Assuming that the residual earnings in the year 2024 will continue at the same level (constant) subsequently for a long time (eternally), calculate the CV (continuing value) of the firm at the end of year 2024. (5 points) Requirement 3: Suggest the intrinsic value of the firm at the end of 2019 based on Residual Income Model using above numbers forecast. ( 10 points) Step by Step Solution
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