If we expect ABC Ltds sales and profit margin to remain unchanged after Year 7 with a stable book value of $17,012, use the accounting-based equity valuation model to estimate ABC Ltds value at the beginning of Year 1.

Year Year Year Year Year Year 2 Year 3 Year 5 1. 8 12% Cost of equity Net income Beginning book value 12% 2,068 10,616 12% 2,260 10,584 12% 2,436 11,668 12% 2,512 12,676 12% 2,556 13,456 12% 2,808 14,532 12% 3,092 15,712 3,092 17,012