Question: 28 Value per Share The following are ROCE forecasts made for a firm at the end of 2017. 2018 2019 2020 Return on Common Equity

28 Value per Share

The following are ROCE forecasts made for a firm at the end of 2017.


	2018	2019	2020
Return on Common Equity (ROCE)	18%	18%	18%

ROCE is expected to continue at the same level after 2020. The firm reported book value of common equity of $6.8 billion at the end of 2017, with 600 million shares outstanding. If the required equity return is 18 percent, what is the per-share value of these shares ?

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