Jarrett Corp Management Believes That After 2015 Jarrett Will Grow at a Following

question 36

Multiple Choice

Jarrett Corp.
At the end of 2010 Jarrett Corp.developed the following forecasts of net income:
$\begin{array}{lccc}& \text {Forecasted } \\ \text { Year: }& \text { Net Income} \\2011&\$20, 856\\2012&\$22,733\\2013&\$24,552\\2014&\$27,252\\2015&\$ 29.978\\\end{array}$

Management believes that after 2015 Jarrett will grow at a rate of 7% each year.Total common shareholders' equity was $112,768 on December 31, 2010.Jarrett has not established a dividend and does not plan to paying dividends during 2011 to 2015.Its cost of equity capital is 12%.
-Assume that a firm's book value at the beginning of the year is $12,500 and that the firm reports net income of $3,200 and pays dividends of $1,100.What will the firm's book value at the end of the year?

• A) $2,100
• B) $15,700
• C) $14,600
• D) $16,800

---

Definitions:

Isometric

Exercise involving muscle contractions without movement, typically performed against an immovable object or force.

Isotonic

Relating to muscle contraction where the muscle shortens to move a load while maintaining constant tension.

Aerobic Fitness

The ability of the heart and lungs to supply oxygen to the muscles during prolonged physical activity, indicating cardiovascular health.

Resting Blood Pressure

The pressure in the arteries when the heart rests between beats, providing a baseline measure of heart health.