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You have estimated a companys cost of equity and made earnings and dividend forecasts: Cost of equity 10% Expected return on equity during the current
You have estimated a companys cost of equity and made earnings and dividend forecasts:
Cost of equity | 10% |
Expected return on equity during the current year | 20% |
Current book value of equity per share | $20 |
Based on this information, what residual income per share would you expect this company to have during the current year?
-$2 | ||
$0 | ||
+$1 | ||
+$2 | ||
None of the other answers are correct |
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