UpStar Sdn Bhd is an established book distributor. The company is wholly owned by Meera Sara....

 

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UpStar Sdn Bhd is an established book distributor. The company is wholly owned by Meera Sara. The company has provided the following forecasts of comprehensive income for Year 2021 to Year 2025: Net Additional information: 1. The company expects comprehensive income to grow 4% annually after Year 2025. Meera Sara withdraws 28% of comprehensive income each year as a dividend. REQUIRED: (a) Year 2021 2022 2023 2024 2025 2. Total common shareholders' equity on January 1, Year 2021, is RM2,777,853. Meera Sara expects to earn a rate of return on her invested equity capital of 12% each year. 3. Present Value Table Period (n) 1 2 3 7 4% 0.962 0.925 534,870 480,020 468,610 491,105 516,668 0.889 0.855 0.822 0.790 0.760 Present value of 1 10% 12% 0.909 0.893 0.826 0.797 0.751 0.712 0.683 0.636 0.621 0.567 0.564 0.507 0.513 0.452 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 Compute the value of the equity (UpStar Berhad) at the beginning of the year 2021 based on the residual income valuation model. Round up your answer to the nearest ringgit. UpStar Sdn Bhd is an established book distributor. The company is wholly owned by Meera Sara. The company has provided the following forecasts of comprehensive income for Year 2021 to Year 2025: Net Additional information: 1. The company expects comprehensive income to grow 4% annually after Year 2025. Meera Sara withdraws 28% of comprehensive income each year as a dividend. REQUIRED: (a) Year 2021 2022 2023 2024 2025 2. Total common shareholders' equity on January 1, Year 2021, is RM2,777,853. Meera Sara expects to earn a rate of return on her invested equity capital of 12% each year. 3. Present Value Table Period (n) 1 2 3 7 4% 0.962 0.925 534,870 480,020 468,610 491,105 516,668 0.889 0.855 0.822 0.790 0.760 Present value of 1 10% 12% 0.909 0.893 0.826 0.797 0.751 0.712 0.683 0.636 0.621 0.567 0.564 0.507 0.513 0.452 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 Compute the value of the equity (UpStar Berhad) at the beginning of the year 2021 based on the residual income valuation model. Round up your answer to the nearest ringgit.

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Value of Equity Total common shareholders equity Present Value of Residual Income RM... View the full answer