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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