National Co. provides consultancy services to various corporate clients in luzon. The growth rate is 5% for Year +1 to Year +5. The firm has provided the following forecasts of com prehensive income for Year +1 to Year +5: Year+1 763,503.00 841,762.06 Year +2 Year +3 883,850.16 928,043.67 974,445.80 Year +4 Year +5 Total common shareh olders' equity was P3,582,836 on January 1, Year +1. The firm does not expect to pay a dividend during the period of Year +1 to Year +5. The cost ofequity capital is 12%. The number of shares outstanding is 1,000,000. The firm expects comprehensive income to grow 3% annually after Year +5. The firm will pay its first dividend in Year +6. Use 5 decimal places for the factors.

National Co. provides consultancy services to various corporate clients in luzon. The growth rate is 5% for Year +1 to Year +5. The firm has provided the following forecasts of com prehensive income for Year +1 to Year +5: Year+1 763,503.00 841,762.06 Year +2 Year +3 883,850.16 928,043.67 974,445.80 Year +4 Year +5 Total common shareh olders' equity was P3,582,836 on January 1, Year +1. The firm does not expect to pay a dividend during the period of Year +1 to Year +5. The cost ofequity capital is 12%. The number of shares outstanding is 1,000,000. The firm expects comprehensive income to grow 3% annually after Year +5. The firm will pay its first dividend in Year +6. Use 5 decimal places for the factors.

Name: 1. Compute the total present value of residual income for the Year +1
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Description: 1. Compute the total present value of residual income for the Year +1 to Year +5, using the residual income valuation model.2. Compute the total present value of residual income on January 1, Year +13. Compute the present value of equity at on Januar

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter13: Valuation: Earnings-based Approach

Section: Chapter Questions

Problem 16PC

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