how can you use a DIVIDEND growth rate to calculate the RESIDUAL INCOME, residual income is the income after equity charge, it has nothing to do with the growth rate of the dividend, furthermore, in the exhibit of this question, it explicitly says that growth rate beyond 2022 is 0

I’m merely pointing out that under the two assumptions mentioned above, you can just derive RI @ t = RI @ t -1 * g without having to recompute every single accounting line every year from Sales to NI to get to the next year RI.

I believe in problems like those they are assuming constant payout ratios. Therefore, if your dividends are growing at a constant rate, then your earnings are growing at that same constant rate, which translates into ROE… etc