Assume the following data:

• A company will earn $1.00 per share forever.

• The company pays out all earnings as dividends.

• Book value per share is $6.00.

• The required rate of return on equity (or the percent cost of equity) is 10 percent.

i. Calculate the value of this stock using the DDM.

ii. Calculate the level amount of per-share residual income that will be earned each year.

iii. Calculate the value of the stock using a RI model.

iv. Create a table summarizing the year-by-year valuation using the DDM and the RI model.