1˚ year

2˚ year

3˚ year

4˚ year

5˚ year

6˚ year

7˚ year

8˚ year

9˚ year

Net Income

112

115

119

122

126

130

134

138

142

(−) Cost of the Capital Employed

(Equity b.o.y. * Cost of Equity 10%)

33

33

34

35

36

38

39

40

41

Residual Income

79

82

85

87

90

92

95

98

101

Present Value of Residual Income

72* (0.909)**

68 (0.826)

64 (0.751)

60 (0.683)

56 (0.621)

52 (0.565)

49 (0.513)

46 (0.466)

-

Terminal Value

-

-

-

-

-

-

-

-

1010***

Present Value of Terminal Value

-

-

-

-

-

-

-

-

471**** (0.4241)**

Equity Value: Equity (b.o.y) + Present Value of Residual Income + Present Value of Terminal Value = 329 + 467 + 471 = 1267