Accounting 2023 Business Finance
2023 2005 Net Income 3 000 Dividends 1 000 Total Assets 12 31 05 35 000 Total Liabilities
2005
Net Income:$3,000
Dividends: $1,000
Total Assets – 12/31/05: $35,000
Total Liabilities – 12/31/05: $21,225
Number of shares outstanding: 1,000
Cost of Equity: 12%
Net income is expected to increase by 10% for the next year, and dividend payout ratio is expected to remain constant. After 2006, retained earnings are expected to decrease to zero. Using the residual income method what is the value per share of Rivaz stock as of 12/31/05? (Points : 2)
$15.25
$15.16
$14.38
$13.77
Net income is expected to increase by 10% for the next year, and dividend payout ratio is expected to remain constant. After 2006, retained earnings are expected to decrease to zero. Using the residual income method what is the value per share of Rivaz stock as of 12/31/05? (Points : 2)
$15.25
$15.16
$14.38
$13.77
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