1．The present value of Raver Industries’ projected residual income (RI) for the next five years is £60 per share. Beyond that time horizon, a key analyst projects that the firm will sustain a RI of £11 per share, which is the RI for year 5. Given a cost of equity of 12 percent, what is the terminal value of the stock as of year 5?

A)   £500.00.

B)   £560.00.

C)   £91.67.

D)   £19.96.

2．The present value of GB Industries’ projected residual income (RI) for the next five years is 70 per share. Beyond that time horizon, a key analyst projects that the firm will sustain a RI of 15 per share, which is the RI for year 5. Given a cost of equity of 12 percent, what is the terminal value of the stock as of year 5?

A)   £125.00.

B)   £500.00.

C)   £560.00.

D)   £19.96.

3．The present value of Forman Electronics’ projected residual income (RI) for the next five years is 80 per share. Beyond that time horizon a key analyst projects that the firm will sustain a RI of 17 per share, which is the RI for year 5. Given a cost of equity of 13 percent, what is the terminal value of the stock as of year 5?

A)   £500.00.

B)   £560.00.

C)   £19.96.

D)   £130.77.

答案和详解如下：

1．The present value of Raver Industries’ projected residual income (RI) for the next five years is £60 per share. Beyond that time horizon, a key analyst projects that the firm will sustain a RI of £11 per share, which is the RI for year 5. Given a cost of equity of 12 percent, what is the terminal value of the stock as of year 5?

A)   £500.00.

B)   £560.00.

C)   £91.67.

D)   £19.96.

The correct answer was C)

The stock’s terminal value as of year 5 is:

TV = 11.00/0.12 = 91.67

2．The present value of GB Industries’ projected residual income (RI) for the next five years is 70 per share. Beyond that time horizon, a key analyst projects that the firm will sustain a RI of 15 per share, which is the RI for year 5. Given a cost of equity of 12 percent, what is the terminal value of the stock as of year 5?

A)   £125.00.

B)   £500.00.

C)   £560.00.

D)   £19.96.

The correct answer was A)

The stock’s terminal value as of year 5 is:

TV = 15.00/0.12 = 125.00

3．The present value of Forman Electronics’ projected residual income (RI) for the next five years is 80 per share. Beyond that time horizon a key analyst projects that the firm will sustain a RI of 17 per share, which is the RI for year 5. Given a cost of equity of 13 percent, what is the terminal value of the stock as of year 5?

A)   £500.00.

B)   £560.00.

C)   £19.96.

D)   £130.77.

The correct answer was D)

The stock’s terminal value as of year 5 is:

TV = 17.00/0.13 = 130.77