Implied growth.

An analyst is investigating the potential growth rates in residual income of companies in the technology sector. He

collects the following data on Lesta Corp., a manufacturer of consumer electronics:

Current share price $$231$

Return on equity $10\%$

Required return on equity $11\%$

Book value per share $$136$

Which of the following percentages is closest to the market implied growth rate of residual income for Lesta Corp.

using the single$-$stage residual income valuation model?

$13\mathrm{.}67\%$

$12\mathrm{.}43\%$

$9\mathrm{.}95\%$