Who else gets everything overvalued using the Residual Operating Income Modle?

Hi,

I have been reading about investing since 2017, and I got into the market for the first time in 2020. After building a certain foundation, I have read quite a lot for Stephen Penman books. However, when I apply the residual operating income model (I add the residual operating income to the common stock equity to get the equity value), assuming growth is 0% to be conservative, I always get a valuation of equity number indicating the market value is overpriced. Is this model very conservative, since the cost of capital is subtracted from the operating income, or am I being not realistic in my input (e.g., I assume the required return of equity to be 10% to 15%. If I use CPAM, I add 1% extra to be conservative)? Should I always a certain percentage of growth (1%-3%) instead of keeping it 0%?

On the other hand, I use the reverse engineering approach to get expected return values. I get some good values when I use that approach (e.g, 9% or 11% with 0% growth). However, that expected return reverse engineering seems to contradict what the residual operating income model is telling me.