What is the growth rate for residual earnings

Reference no: EM131490736

Question: Reverse Engineering Earnings Forecasts (Easy) The equity of a firm trades at 2.6 times book value of $239 .0 million at the end of 2012 and your required return is 9 percent. The forward earnings forecast for 2013 is $33.46 million and the firm pays no dividends.

a. What is the growth rate for residual earnings after 2013 that is implied by the market price?

b. What is the forecast of earnings for 2014 that is implicit in the market price?

Reference no: EM131490736

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