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What is the value of equity of rich plc

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Reference no: EM132493155

Point 1: Rich plc has book value of equity of £100 million. Its return on equity is expected to remain at 12% in perpetuity, its cost of equity is 10%, and its payout ratio 70%.

Question a. Estimate the residual income next year and the growth rate.

Question b. What is the value of equity of Rich plc?

Reference no: EM132493155

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