Security Analysis homework

$10 per share (Bii0=$10), , is expected to earn $2.00 forever, and pays out all of its earnings as dividends. Its required return on equity is 12.5 percent. a) Calculate per-share book value for NB for each of the next three years. B2=i B2=i B3=i b) Calculate the residual income for NB for each of the next three years. RI1=i Ry= Re2=i c) Based on what you observe in (a) and (b), determine the value for the stock of NB using the residual income valuation model. $10 per share (Bii0=$10), , is expected to earn $2.00 forever, and pays out all of its earnings as dividends. Its required return on equity is 12.5 percent. a) Calculate per-share book value for NB for each of the next three years. B2=i B2=i B3=i b) Calculate the residual income for NB for each of the next three years. RI1=i Ry= Re2=i c) Based on what you observe in (a) and (b), determine the value for the stock of NB using the residual income valuation model