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 compttitors that are publicly traded:

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

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

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

of Is percent is appoopriate.

Assume the company's growth rate slows to the industry average in five years. What future return on equity does this imply?