Understanding Residual Income in Valuation

In the context of equity valuation, the Residual Income Valuation model is a method used to determine the intrinsic value of a company's equity. This model is based on the concept of residual income, which is defined as net income minus the equity charge (the required return on equity). To better understand how the Residual Income Valuation works, consider the following situation:

A company has a net income of $50 million and a book value of equity of $200 million. If the required return on equity is 10%, what is the residual income for the company?