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Residual Income Valuation Method Suppose that BKE has the following: Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 Common shareholders' equity at beginning of year $ 4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $ 5,001.22 $ 5,503.76 Comprehensive income available for common shareholders 1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $ 2,003.45 Their required rate of return is 9.25% Their long run growth rate is 4.20% They have 750 M shares of stock. Market Based Valuation Methods Suppose that BKE has the following: BKE Price $ 87.21 Number of shares (K) 64,575 Book value of equity K$ 588,324 EPS 6.75

Residual Income Valuation Method Suppose that BKE has the following: Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 Common shareholders' equity at beginning of year $ 4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $ 5,001.22 $ 5,503.76 Comprehensive income available for common shareholders 1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $ 2,003.45 Their required rate of return is 9.25% Their long run growth rate is 4.20% They have 750 M shares of stock. Market Based Valuation Methods Suppose that BKE has the following: BKE Price $ 87.21 Number of shares (K) 64,575 Book value of equity K$ 588,324 EPS 6.75

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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Residual Income Valuation Method Suppose that BKE has the following: Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 Common shareholders' equity at beginning of year $ 4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $ 5,001.22 $ 5,503.76 Comprehensive income available for common shareholders 1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $ 2,003.45 Their required rate of return is 9.25% Their long run growth rate is 4.20% They have 750 M shares of stock. Market Based Valuation Methods Suppose that BKE has the following: BKE Price $ 87.21 Number of shares (K) 64,575 Book value of equity K$ 588,324 EPS 6.75
Transcribed Image Text:Residual Income Valuation Method Suppose that BKE has the following: Year +1 Year +2 Year +3 Year +4 Year +5 Year +6 Common shareholders' equity at beginning of year $ 4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $ 5,001.22 $ 5,503.76 Comprehensive income available for common shareholders 1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $ 2,003.45 Their required rate of return is 9.25% Their long run growth rate is 4.20% They have 750 M shares of stock. Market Based Valuation Methods Suppose that BKE has the following: BKE Price $ 87.21 Number of shares (K) 64,575 Book value of equity K$ 588,324 EPS 6.75
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