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9. Compute the value of Jarrett Corp. on January 1, 2011, using the residual income valuation model. Use the half- year adjustment. $112,768 $185,329 $195,540 $133,624

9. Compute the value of Jarrett Corp. on January 1, 2011, using the residual income valuation model. Use the half- year adjustment. $112,768 $185,329 $195,540 $133,624

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Jarrett Corp. At the end of 2010 Jarrett Corp. developed the following forecasts of net income: Year 2011 2012 2013 2014 Forecasted Net Income $112,768 $185,329 $195,540 $133,624 $20,856 $22,733 $24,552 $27,252 2015 $29,978 Management believes that after 2015 Jarrett will grow at a rate of 7% each year. Total common shareholders' was $112,768 on December 31, 2010. Jarrett has not established a dividend and does not plan to paying dividends during 2011 to 2015. Its cost of equity capital is 12%. 9. Compute the value of Jarrett Corp. on January 1, 2011, using the residual income valuation model. Use the half- year adjustment.
Transcribed Image Text:Jarrett Corp. At the end of 2010 Jarrett Corp. developed the following forecasts of net income: Year 2011 2012 2013 2014 Forecasted Net Income $112,768 $185,329 $195,540 $133,624 $20,856 $22,733 $24,552 $27,252 2015 $29,978 Management believes that after 2015 Jarrett will grow at a rate of 7% each year. Total common shareholders' was $112,768 on December 31, 2010. Jarrett has not established a dividend and does not plan to paying dividends during 2011 to 2015. Its cost of equity capital is 12%. 9. Compute the value of Jarrett Corp. on January 1, 2011, using the residual income valuation model. Use the half- year adjustment.
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