Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE ANSWER QUESTION QUICKLY. WILL THUMBS UP IMMEDIATELY. The brothers Robert Reagan and Thomas Reagan formed Reagan Technologies. The company has earned healthy profits for

PLEASE ANSWER QUESTION QUICKLY. WILL THUMBS UP IMMEDIATELY.

The brothers Robert Reagan and Thomas Reagan formed Reagan Technologies. The company has earned healthy profits for the past ten years. The reason behind this is the unique technology the company uses. The company is in the business of providing plastic computer parts for personal computers. Reagan Technologies has 300,000 shares outstanding for the company. Each brother owns 150,000 shares. The total dividends of the company were $640,000. The return on equity (ROE) is 21%. The Reagan Technologies required rate of return is 18%.

Total earnings - $1,605,000.00 Payout ratio - 39.88% Retention ratio - 60.12% Growth rate - 12.63% Total equity value - $11,909,565.22 Value per share - $39.70 PE ratio - $7.42

The industry growth rate is 7.81% and the industry PE is $18.08 / $1.51 = 12.00. Compare Reagan Technologies with the industrys growth and PE rates. What are the reasons for the differences? Will this affect future growth?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations Of Finance The Logic And Practice Of Finance Management

Authors: Arthur J. Keown, John H. Martin, David F. Scott, John Petty, J. William Petty

5th Edition

0132019299, 9780132019293

More Books

Students also viewed these Finance questions