Stock Valuation at Ragan Engines
	Input area:
	Shares owned by each sibling	125,000
	Ragan EPS	$4.20
	Dividend to each sibling	$157,500
	Ragan ROE	20%
	Ragan required return	16%
		EPS	DPS	Stock price	ROE	R
	Blue Ribband Motors Corp.	$1.15	$0.34	$18.25	13.00%	15.00%
	Bon Voyage Marine, Inc.	1.45	0.42	15.31	16.00%	18.00%
	Nautilus Marine Engines	(0.21)	0.60	28.72	N/A	14.00%
	Industry average
	Nautilus EPS w/o write-off	$1.85
	Output area:
				Notes:
1)	Total earnings
	Payout ratio			= Total Dividends / Total Earnings
	Retention ratio			= (1- Payout ratio)
	Growth rate			= Retention Ratio * ROE
	Total dividends next year			= Last year dividends * growth rate
	Total equity value			Use Dividend Growth Model to find equity value
	Value per share	$-		= total equity / total number of shares
2)	Industry EPS	$1.48		Industry average DPS / Industry EPS
	Industry payout ratio
	Industry retention ratio			= (1- Payout ratio)
	Industry growth rate
	Year	Total dividends
	1	$-
	2	$-
	3
	4
	5
	6
	Stock value in Year 5			Use Dividend Growth Model to find stock value with 6th year dividend, industry growth rate and industry average R
	Total stock value today			Add (NPV of Total dividends from year 1 to 5) and PV of stock value in year 5
	Value per share	$-
3)	Industry PE
	Ragan PE (original assumption)
	Ragan PE (revised assumption)
	Stock price implied by
	industry PE
4)	Total earnings			= EPS * total number of shares
	Cash cow value			= Total earnings / Industry average R
	Percentage not attributable to			= Cash cow value / Total stock value today
	growth opportunities
	Percentage attributable to
	growth opportunities
5)	ROE			= Industry Growth rate / Retention ratio