Happy, Inc. was founded 9 years ago by siblings Brandon and Rachael Happy. The company manufactures and installs commercial heating, ventilation, and cooling (HVAC) units. Happy, Inc. experienced rapid growth because of a proprietary technology that increases the energy efficiency of its units. The company is equally owned by Brandon and Rachael. The original partnership agreement between the siblings gave each 50,000 shares of stock. In the event either wished to sell stock, the shares first had to be offered to the other at a discounted price. Although neither sibling wants to sell, they had decided they should value their holdings in the company. To get started, they have gathered the following information about their main competitors: Dividends per Return on Competitor A Competitor B Competitor C 10 Industry Average 12 Earnings per share (EPS) share (DPS) Stock price Equity (ROE) Required Return $ 1.30 $ 0.16 $ 25.34 8.50% 10.00% 1.95 $ 0.23 $ 29.85 10.50% 13.00% $ (0.37) $ 0.14 $ 22.13 9.78% 12.00% $ 0.96 $ 0.18 $ 25.77 9.59% 11.67% Competitor C's negative earnings per share were the result of an accounting write-off last year. Without the write-off, earnings per share for the company would have been $1.10. Last year, Happy, Inc. had an EPS of $3.15 and paid a dividend to Brandon and Rachael of $45,000 each. The company also had a return on equity of 17 percent. The siblings believe that 14 percent is an appropriate required return for the company. 15 Question 1 16 Assuming the company continues its current growth rate, what is the value per share of company's stock?