Use the following information and the residual income model to compute the value of Southbay corporation.

ROE will continue at 15 % percent for the next five years and 10 percent thereafter with all earnings reinvested (no dividends paid). Cost of equity is 10 percent. The beginning book value per share is $10. Premium over book value at the end of five years will be 20 percent of the book value at the end of 5th year.