Mini-Case Valuing Stocks Your investment adviser has sent you three analyst re- ports for a young, growing company named Vegas Chips, Incorporated. These reports depict the company as spec- ulative, but each one poses different projections of the company's future growth rate in earnings and dividends. All three reports show that Vegas Chips earmed $1.20 per share in the year just ended. There is consensus that a fair rate of retum to investors for this common stock is 14%, and that management expects to consistently earn a 15% retum on the book value of equity (ROE = 15%) Assignment 1 The analyst who produced report A makes the as- sumption that Vegas Chips will remain a small, regional company that, although profitable, is not expected Discuss the feature(s) that drive the differing valuations of Vegas Chips. What additional information do you need to garmer confidence in the projections of each analyst report? 4