Question: Section 2- Equity Analysis FSA Company's Forecasted Financial Data (In billions) 2020 2021 2022 2023 2024 Net income 1.64 1.69 1.74 1.79 1.84 Year end

Section 2- Equity Analysis FSA Company's Forecasted Financial Data (In billions) 2020 2021 2022 2023 2024 Net income 1.64 1.69 1.74 1.79 1.84 Year end Book Value of equity 5.58 5.64 5.70 5.75 5.81 a. Explain what is an accounting based equity valuation model. Using the data given above, estimate FSA's value at the beginning of year 2020. Assume that the abnormal earnings are expected to be zero after year 2024. Use the accounting based equity valuation model.

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