Use the following for Apple NASDAQ: AAPL to answer questions 1-3.

Apple's ROE will be 20 percent for the next five years (and 15 percent thereafter) with all earnings reinvested (no dividends paid).

Cost of equity equals 10 percent.

Year 0's book value of equity per share (B₀) = $40 per share.

Premium over book value at the end of five years will be 10 percent of Year 5 ending book value per share, i.e., P₅ - B₅ = 0.1B₅.

The clean surplus relation holds.

1. Compute the residual income per share in Year 1. 2. Compute the residual income per share in Year 2. 3. The residual incomes for Year 3, Year 4, and Year 5 are $5.76, $6.91, and $8.30, respectively. The Year 5 ending book value per share (B_5) is $99.53. Estimate Apple's current value per share using version 4 of the multistage residual income valuation model that assumes a premium over book value at the end of the forecast horizon.