Simonson Investment Trust International (SITI) is expected to earn $4.00, $5.00, and $8.00 for the next three years. SITI will pay annual dividends of $2.00, $2.50, and $20.50 in each of these years. The last dividend includes a liquidating payment to shareholders at the end of Year 3 when the trust terminates. SITIs book value is $8 per share, and its required return on equity is 10 percent.

Calculate return on equity and use it as an input to the residual income model to calculate SITIs value.