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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
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 $ Last year, Ragan had an EPS of $ and paid a dividend io Carrington and
Getevieve of $ each. The company also had a return on equity of 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?
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