Calculating Intrinsic Value using Residual Income Model

Corporate Finance Analysts often use the Residual Income Model (RIM) to evaluate a company's stock. This model calculates the intrinsic value of equity by utilizing the concept of residual income, which is the net income for the period minus the equity charge. E-DAINC Inc. has a book value of equity of $1 million at the start of the year and reported a net income of $200,000 for the year. The required return on equity is estimated at 12%.

If the company's equity continues to generate residual income at the current rate, what would be the forecasted value of equity at the end of the year using the Residual Income Model?