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%.

Hint for Question 1: The earnings per share are $5.35. Check the case for how many shares are outstanding. Multiply the earnings per share by the total shares outstanding for the total earnings.

The Stock Valuation of Reagan Technologies Inc.

Calculate what are the total earnings?