Question 4 (6.25 points) Abnormal earnings growth is (Cho); (Cum-dividend earnings growth rate Required equity return) . Current earnings. Ozero if earnings is growing at the rate larger than the required equity return. Cum-dividend earnings Normal earnings, O Ex-dividend earnings - Normal earnings. Question 5 (6.25 points) Residual Earnings at time t can be calculated by (Ch5) (ROCE at time t - (1+Required equity return)) Book value at the end of time t- Earnings at time (1+ Required equity return) Book value at the end of time t-1 (Required equity return - ROCE at time t) * Book value at the end of time t-1 (ROCE at time t - Required equity return) * Book value at the end of time t-1