Use the data from Christy Company in the chapter to answer the following:

a. CalculateChristyCompanysresidualincomeforeachofYear1throughYear5. b. Use the accounting-based equity valuation model to estimate the value of Christys equity at January 1 of each

of Year 2 through Year 5.

c. The chapters discussion of Christy Company assumes that accounting for book value is not conservative. How does the use of conservative accounting principles affect the accounting-based valuation task?

d. Use the PB formula to determine the PB ratio at January 1 of each of Year 2 through Year 5. e. UsethePEformulatodeterminethePEratioatJanuary1ofeachofYear3throughYear5.