QUESTION 2 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 S3.36 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 retum of 9%, deal with the following a. Prepare a table of target prices for 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 b. KMB is currently trading at $52 per share. What is the market's forecast of the growth rate in residual earnings after 2004? c. At this implicit growth rate, what are the EPS that the market is forecasting for 2005 and 2006? d. What is the market's implicit target price at the end of 2004