如下

问题如下：

For the multistage model, Castovan forecasts TTCI’s ROE to be higher than its long-term ROE for the first three years. Forecasted earnings per share and dividends per share for TTCI are presented in Exhibit 3. Starting in Year 4, Castovan forecasts TTCI’s ROE to revert to the constant long-term ROE of 12% annually. The terminal value is based on an assumption that residual income per share will be constant from Year 3 into perpetuity.

Beckworth questions Castovan’s assumption regarding the implied persistence factor used in the multistage RI valuation. She tells Castovan that she believes that a persistence factor of 0.10 is appropriate for TTCI.The persistence factor suggested by Beckworth will lead to a multistage value estimate of TTCI’s shares that is:

选项：

A.

less than Castovan’s multistage value estimate

B.

equal to Castovan’s multistage value estimate

C.

greater than Castovan’s multistage value estimate

解释：

In Castovan’s multistage valuation, she assumes that TTCI’s residual income will remain constant in perpetuity after Year 3. This perpetuity assumption implies a persistence factor of 1 in the calculation of the terminal value. A persistence factor of 0.10 indicates that TTCI’s residual income is forecasted to decline at an average rate of 90% per year. This assumption would lead to a lower valuation than Castovan’s multistage value estimate, which assumes that residual income will remain constant in perpetuity after Year 3.