I am valuing a stock using a residual income model. The current book value of...
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I am valuing a stock using a residual income model. The current book value of the stock is $20. The company is expected to produce $2.00 of EPS next year and the dividend per share is $1.00. If the company's cost of equity is 10%, what are the expected residual earnings for next year?
1. 0.00
2. 0.90
3. 1.00
4. 1.10
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