Question: Consider the information given below. existing ROE = 20%; this will continue for the next 6 years. rS = 12% B0 = $18 payout ratio

  1. Consider the information given below. existing ROE = 20%; this will continue for the next 6 years. rS = 12% B0 = $18 payout ratio = 30% Using the residual income model, calculate the stock share value for the end of year 6 the P/B ratio is projected to be 1.6.

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