Q) Using the model Byers selected as alternative (RI Model), the intrinsic value of Multinite is?
Doubt: In Q6 of this item set, I did not understand how terminal value is calculated. I understood that Equity charge is subtracted from every year’s EPS to arrive at Residual income for all 3 years. Could you please explain what is being done with the “persistence factor” and how that calculation is being done for PV of terminal value?
Q Identification Tag: The approach selected by Byers is the Residual Income Approach.
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