**PLEASE SHOW EXCEL FORMULAS**

Mantz Engines, Inc., is a privately owned company that was founded seven years ago by Sydney and Claire Mantz. The company manufacturers farm engines used primarily in farm equipment. Mantz has experienced rapid growth because of a proprietary technology that increases the fuel efficiency of its engines with very little sacrifice in performance. The company is equally owned by Sydney and Claire Mantz. The original agreement between the siblings gave each 200,000 shares of stock. The Mantzs have not issued any additional stock nor have they sold any of their stock since founding the company.

Anna has asked Aiden to determine a value per share of Mantz stock. Aiden has gathered the following information about engine manufacturing firms that are publicly traded

	EPS	DPS	STOCK PRICE	ROE	ROA
Jensen Motors Corp.	$ 3.50	$ 2.00	$ 37.00	12.00%	9.00%
Blue Cow Farm Engines Inc.	8.00	4.00	90.00	15.00%	11.00%
Horrocks Farm Equipment	(0.50)	1.00	30.00	16.00%	13.00%

Horrocks Farm Equipments negative earnings per share (EPS) was the result of an accounting write-off last year. Without the write-off, EPS for the company would have been $2.25. Last year, Mantz Engines Inc (MEI) had an EPS of $4.00 and paid a dividend to Sydney and Claire Mantz of $300,000 each. The company also had a return on equity of 16%. Anna tells Aiden that a 14% required rate of return should be used to evaluate the value of Mantz

DPS= Dividends per share

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

Future ROE: