Using the zero net present value investments assumption for the perpetuity period, calculate the value of the perpetuity (terminal value) under the residual income model under the following assumptions.
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In thousands, except %
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Residual income in first year of perpetuity period
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$ 10,000
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Sustainable growth rate in NOPAT
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2%
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Weighted-average cost of capital
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10%
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Book value of core operations at beginning of first year of perpetuity period
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$ 205,000
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Book value of core operations at end of first year of perpetuity period
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$ 217,000
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Number of years in forecast horizon
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7 years
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