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LOS h, (Part 1): Explain continuing residual income and list the common assumptions regarding continuing residual income.
Q1. Continuing residual income is defined as the:
A) permanent as opposed to the transitory part of residual income.
B) residual income that is expected beyond the initial forecast time horizon.
C) residual income that forces the net present value to zero.
Q2. A common assumption regarding continuing residual income (RI) is that RI:
A) falls to the average industry level.
B) manifests a generally increasing trend indefinitely.
C) declines to zero as return on equity (ROE) drops to the cost of equity over time. | 
发表于 2009-3-9 14:33
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