Larissa has asked Dan to determine a value per share of Ragan stock. To accomplish this, Dan has gathered the following information

about some of Ragan's competitors that are publicly traded:

Nautilus Marine Engines's negative carnings per share $($EPS$)$ were the result of an accounting write$-$off last year. Without the write$-$

off, EPS for the company would tave boen $$1\mathrm{.}60.$ Last year, Ragan had an EPS of $$4\mathrm{.}54$ and paid a dividend io Carrington and

Genevieve of $$60,000$ each. The company also had a feturn on equity of $18$ percent. Larissa tells Dan that a required return foe Ragan

of $18$ percent is appopriate.

What is the industry average price$-$earnings ratio? What is Ragan's price$-$earnings ratio? Comment on any differences and explain

why they may exist.