**(Schweser Residual Income Valuation EOC q3)**

Does anyone know how we get beginning book value per share for 2018-2021 from the below?

For reference, the answer is: 2018: 10.62; 2019: 11.89; 2020: 13.32; 2021: 14.91.

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Josef Robien, CFA, is valuing the common stock of British Cornucopia Bank (BCB) as of December 31, 2017, when the book value per share is £10.62. In this effort, Robien has made the following assumptions:

- Earnings per share (EPS) will be 20% of the beginning book value per share for each of the next three years.
- BCB will pay cash dividends equal to 40% of EPS.
- At the end of three years, BCB’s common stock will trade at four times its book value.
- Beta for BCB is 0.7, the risk-free rate is 4.5%, and the equity risk premium is 5.0%.

Q: The residual income per share in 2020 and the present value of continuing residual income as of the end of 2019 are closest to: