Current book value per share is $30. For the next three years, the net income and dividends paid per share are shown in the table below. Compute the ending book value and residual income for each of the three years. The required rate of return on equity is 10%. The share price at the end of year 3 will be 2.5 times the book value at that time.

Net income is each year and dividends are 2 each year.

Use the residual income model to estimate the value per share.