Help on Residual Earnings and Abnormal Earnings
I am trying to value Goldman Sachs for a project and I cannot figure out the model for Residual and Abnormal earnings. This is what I have so far: Year 0 Year 1 Year 2 Year 3
Earnings $14.13 $14.08 $15.25 $16.41
Dividends $1.77 $2.04 $2.14 $2.24
Book Value $144.67 $155.93 $168.79 $180.76
Re -9.07 -11.03 -11.65
Re Growth Rate
Reinvested Dividends 0.2634 0.3035 0.3184
Cum-Dividends 14.34 15.5 16.73
Normal Earnings $16.23 $16.18 $17.52
Abnormal Earnings -1.8891 -0.6215 -0.7907
Could anyone help me with why GS has negative and abnormal earnings? and what that means specifically?
