A company has a steady track record in terms of both return on equity and growth. At
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A company has a steady track record in terms of both return on equity and growth. At yearend 2021, the company had a book value of 30 euro per share. For the foreseeable future, the company is expected to achieve an ROE of 15% (annually, on trailing book value) and to pay out (annually) onethird of its earnings in dividends. The required rate of return is 12%. Forecast the company’s residual income for the years 2022, 2023, 2024 and 2025. Show all the calculations.
Related Book For
Equity Asset Valuation
ISBN: 978-0470571439
2nd Edition
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen
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