Input area: Shares owned by each sibling Ragan EPS Dividend to each sibling Ragan ROE Ragan required return $ $ 125,000 3.65 195,000 18% 13% $ $ Blue Ribband Motors Corp. Bon Voyage Marine, Inc. Nautilus Marine Engines Industry average Nautilus EPS w/o write-off EPS 1.24 1.55 (0.25) 0.85 DPS 0.39 0.47 0.67 0.51 Stock price S 20.10 16.85 31.60 S 22.85 ROE 11.00% 14.00% NIA 12.50% R 14.00% 17.00% 13.00% 14.67% S S S 1.93 Output area: Answers in Blue Cells Below 1) Total earnings Payout ratio Retention ratio Growth rate Total dividends next year Total equity value 0.58% 10.44% Value per share 20 2) Industry EPS Industry payout ratio Industry retention ratio Industry growth rate 0.40% 0.05% Total dividends Year 1 2 3 4 5 6 You need to answer this correctly in order to answer the next five cells correctly. Increase dividends at growth rate Increase dividends at growth rate Increase dividends at growth rate Increase dividends at growth rate Increase dividends at growth rate Stock value in Year 5 Total stock value today Use constant growth model here Take back value of stock at end of period 5 back to period 0. Value per share $ This is present value of D41-D45 plus D48 3) Industry PE Ragan PE (original assumption) 18.43 Ragan PE (revised assumption) Stock price implied by industry PE 4) ROE