Question

Rivaz Corporation 2005 Net Income $ 3,000 Dividends $ 1,000 Total Assets - 12/31/05 $35,000 Total Liabilities - 12/31/05 $21,225 Number of shares outstanding 1.000 Cost of Equity 12% Net income is expected to increase by 10% for the next year, and dividend payout ratio is expected to remain constant. After 2006, retained earnings are expected to decrease to zero. Using the residual income method what is the value per share of Rivaz stock as of 12/31/05? Using the dividend discount model, assuming dividends grow at 10% per year for the next two years and at 5% thereafter, what is the value per share of Rivaz Corporation at 12/31/05?

          Rivaz Corporation

2005
Net Income $ 3,000
Dividends $ 1,000
Total Assets - 12/31/05 $35,000
Total Liabilities - 12/31/05 $21,225
Number of shares outstanding 1.000
Cost of Equity 12%

Net income is expected to increase by 10% for the next year, and dividend payout ratio is expected to remain constant. After 2006, retained earnings are expected to decrease to zero. Using the residual income method what is the value per share of Rivaz stock as of 12/31/05?

Using the dividend discount model, assuming dividends grow at 10% per year for the next two years and at 5% thereafter, what is the value per share of Rivaz Corporation at 12/31/05?

Rivaz Corporation

2005
Net Income 3,000
Dividends 1,000
Total Assets - 12/31/05 35,000
Total Liabilities - 12/31/0521,225
Number of shares outstanding 1.000
Cost of Equity 12%

Net income is expected to increase by 10% for the next year, and dividend payout ratio is expected to remain constant. After 2006, retained earnings are expected to decrease to zero. Using the residual income method what is the value per share of Rivaz stock as of 12/31/05?

Using the dividend discount model, assuming dividends grow at 10% per year for the next two years and at 5% thereafter, what is the value per share of Rivaz Corporation at 12/31/05?

Added by Greg B.

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