EPS	DPS	STOCK PRICE	ROE	ROA
Blue Ribband Motors Corp.	$              1.24	$              0.39	$            20.10	11.00%	14.00%
Bon Voyage Marine, Inc.	1.55	0.47	16.85	14.00%	17.00%
Nautilus Marine Engines	(0.25)	0.67	31.60	N/A	13.00%
Industry average	0.85	0.51	22.85	12.50%	14.67%

The company is equally owned by Carrington and Genevieve. Theoriginal agreement between the siblings gave each 125,000 shares ofstock. Larissa has asked Dan to determine a value per share ofRagan stock. To accomplish this Dan has gathered the following infoabout some public competitors. Nautilus Marine Engines (EPS) wasthe result of an accounting write-off last year. Without thewrite-off, EPS for the company would have been $1.93. Last year,Ragan had an EPS of $3.65 and paid a dividend to Carrigton andGenevieve for $195,000 each. The company also had a ROE of 18%.Larissa teslls Dan that a required return for Ragan of 13% isappropriate.

2. Dan has examined the company’s financial statements, aswell as examining those of its competitors. Although Ragancurrently has a technological advantage, Dan’s research indicatesthat Ragan’s competitors are investigating other methods to improveefficiency. Given this, Dan believes that Ragan’s technologicaladvantage will last only for the next fiveyears. After that period, the company’s growth will likelyslow to the industry average. Additionally, Dan believes theindustry average required return is more appropriate. Under Dan’sassumptions, what is the estimated stock price?(Do not round intermediatecalculations) a. Calculate the industry's average growth rate. You mayneed to adjust for nonrecurring events that would impact theindustry information

Average Industry Growth Rate =

b. Calculate the Dividends for Ragan for each of the next 6years

c. What is the value of the stock today and what is thevalue per share?