Q 18 Liquidators Inc. currently has a book value of equity per share equal to $10. The company is expected to have ROE of 44% and reinvest 100% of its earnings every year for the next 2 years. According to analysts' forecasts, Liquidators Inc. will be liquidated at the end of year 2 with a liquidation value equal to the book value of equity per share at the end of year 2. The required rate of return on the company's equity is equal to 20%. What is Liquidators Inc.'s intrinsic value per share equal to? Options -  $14.40 $10 $6.94 $12

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.