Question:Abbott
Lab made $2.80 net income per share last year and paid out $1.30 in
dividend....
Question
Abbott
Lab made $2.80 net income per share last year and paid out $1.30 in
dividend....
Abbott
Lab made $2.80 net income per share last year and paid out $1.30 in
dividend. The company had a book value (or equity) per share of
$20. The market has a risk free rate of 3.1% and market
return 11.1%. Abbott has a historical beta of
.90.
-What
is the residual income last year?
-Calculate
the stock fair value based on Residual Income Model.