Chapter 9 Stock Valuation at Ragan Engines Input area: Shares owned by each sibling Ragan EPS...

  

 

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Chapter 9 Stock Valuation at Ragan Engines Input area: Shares owned by each sibling Ragan EPS Dividend to each sibling Ragan ROE Ragan required return Blue Ribband Motors Corp. Bon Voyage Marine, Inc. Nautilus Marine Engines Industry average Nautilus EPS w/o write-off LA LA $ $ $ 150,000 5.35 320,000 21% 18% EPS 1.19 $ 1.26 (0.27) 0.73 $ 2.07 DPS 0.19 $ 0.55 0.57 0.44 $ Stock price 16.32 13.94 23.97 18.08 ROE 10.00% 12.00% N/A 11.00% R 12.00% 17.00% 16.00% 15.00% Output area: 1) Total earnings Payout ratio Retention ratio Growth rate Total dividends next year Total equity value Value per share 2) Industry EPS Industry payout ratio Industry retention ratio Industry growth rate Year 1 2 3 4 5 6 Stock value in Year 5 Total stock value today Value per share 3) Industry PE Ragan PE (original assumption) | Ragan PE (revised assumption) Stock price implied by industry PE 4) Total earnings Cash cow value Percentage not attributable to growth opportunities 5) ROE Percentage attributable to growth opportunities Total dividends ||||| Chapter 9 Stock Valuation at Ragan Engines Input area: Shares owned by each sibling Ragan EPS Dividend to each sibling Ragan ROE Ragan required return Blue Ribband Motors Corp. Bon Voyage Marine, Inc. Nautilus Marine Engines Industry average Nautilus EPS w/o write-off LA LA $ $ $ 150,000 5.35 320,000 21% 18% EPS 1.19 $ 1.26 (0.27) 0.73 $ 2.07 DPS 0.19 $ 0.55 0.57 0.44 $ Stock price 16.32 13.94 23.97 18.08 ROE 10.00% 12.00% N/A 11.00% R 12.00% 17.00% 16.00% 15.00% Output area: 1) Total earnings Payout ratio Retention ratio Growth rate Total dividends next year Total equity value Value per share 2) Industry EPS Industry payout ratio Industry retention ratio Industry growth rate Year 1 2 3 4 5 6 Stock value in Year 5 Total stock value today Value per share 3) Industry PE Ragan PE (original assumption) | Ragan PE (revised assumption) Stock price implied by industry PE 4) Total earnings Cash cow value Percentage not attributable to growth opportunities 5) ROE Percentage attributable to growth opportunities Total dividends |||||

Answer rating: 100% (QA)

The only point to be noted here is that for Nautilus the EPS of 207 should be taken ie without the w... View the full answer