What does residual income represent

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Reference no: EM132072391

Answer the following question

What does residual income represent? If a Firm's residual income for a particular year is negative, does that mean the firm necessarily reported a loss on the income statement? Explain.

What does it mean when a Firm's residual income is zero? What is the relevance of book value of common equity in the residual valuation approach?

Reference no: EM132072391

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