Use the information

below to answer question 39 and 40.

An equity analyst is evaluating

a potential investment in a firm and has gathered the following information as

of December 2024.

·       Current price equals R84.

·       Cost of equity equals R14.20.

·      

The firm is expected to exhibit a ROE of 20% over

the next three years.

·       The book value per share is currently R100.

·       The firm has a dividend payout ratio of 30%.

·      

Forecasted earnings in years one to three are

equal to ROE multiplied by beginning book value.

·      

Assuming that after three

years, continuing residual income falls to zero.

The terminal value, based on a perpetuity of year

three’s residual income is close to: