Question: An analyst at time t is calculating the present value of abnormal earnings. She has the following information: Beginning book value of equity = $50

An analyst at time t is calculating the present value of abnormal earnings. She has the following information:

Beginning book value of equity = $50 000

Net income = $10 000

Cost of equity = 12 per cent

What would be the present value of abnormal earnings at t+1?

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