Question
Refer to the table for Able Company questions. Year 1 2 3 . 1/1 12/31 12/31 12/31 Predicted EPS . $10 $10 $10 BV per
Refer to the table for Able Company questions.
| Year | 1 | 2 | 3 | |
| . | 1/1 | 12/31 | 12/31 | 12/31 |
| Predicted EPS | . | $10 | $10 | $10 |
| BV per share | $80 | . | . | . |
| Dividends | . | $4 | $4 | $4 |
The discount rate is 10%, which makes the present value factor for one year - 0.90909; for two years - 0.8264; and for three years - 0.7513.
What is the abnormal earnings for year 1?
| a. | 1.818 | |
| b. | 2.00 | |
| c. | 3.64 | |
| d. | 4.40 | |
| e. | 4.88 |
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Audit Workbook
Authors: Azhar Ul Haque Sario
1st Edition
B0C9SG1YC6, 979-8851207891
