Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Stock valuation at ragan inc mini case solution

21/11/2020 Client: papadok01 Deadline: 24 Hours

Mini Case: Stock Valuation at Ragan Engines

Larissa has been talking with the company’s directors about the future of East Coast Yachts. To this pint, the company’s yachts, including engines. Larissa has decided that East Coast Yachts should consider the purchase of an engine manufacturer to allow East Coast Yachts to better integrate its supply chain and get more control over engine features. After investigating several possible companies, Larissa feels that the purchase of Ragan Engines, Inc. is a possibility. She has asked Dan Ervin to analyze Ragan’s value.

Ragan Engines, Inc. was founded nine years ago by a brother and sister – Carrington and Genevieve Ragan – and has remained a privately-owned company. The company manufactures marine engines for a variety of applications. Ragan has experienced rapid growth because of a proprietary technology that increases the fuel efficiency of its engines with very little sacrifice in performance. The company is equally owned by Carrington and Genevieve. The original agreement between the siblings gave each 150,000 shares of stocks.

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 competitors that are publicly traded:

EPS

DPS

Stock price

ROE

R

Blue Ribband Motors Corp

$1.09

$.19

$16.32

10.00%

12.00%

Bon Voyage Marine INC

1.26

.55

13.94

12.00

17.00

Nautilus Marine Engines

(.27)

.57

23.97

N/A

16.00

Industry Average

$.73

$.44

$18.08

11.00%

15.00%

Nautilus Marine Engines’ negative earnings per share (EPS) were the result of an accounting write off last year. Without the write off, EPS for the company would have been $2.07. Last year, Ragan had an EPS of $5.35 and paid a dividend to Carrington and Genevieve of $320,000 each. The company also had a return on equity of 21 percent. Larissa tells Dan that a required return for Ragan of 18 percent is appropriate.

1. Assuming the company continues its current growth rate, what is the value per share of the company’s stock?

2. Dan has examined the company’s financial statements, as well as examining those of its competitor’s. Although Ragan currently has a technological advantage. Dan’s research indicates that Ragan’s competitors are investigating other methods to improve efficency. Given this, Dan believes that Ragan’s technological advantage will last only for the next five years. After that period, the company’s growth will likely slow to the industry average. Additionally, Dan believes that the required return the company uses is too high. He believes the industry average required return is more appropriate. Under Dan’s assumptions, what is the estimated stock price?

3. What is the industry average price –earnings ratio? What is Ragan’s price-earnings ratio? Comment on any differences and explain why they may exist.

4. Assume the company’s growth rate declines to the industry average after five years. What percentage of the stock’s value is attributable to growth opportunities?

5. Assume the company’s growth rate slows to the industry average in five years. What future return on equity does this imply?

6. Carrington and Genevieve are not sure if they should sell the company. If they do not sell the company outright to East Coast Yachts, they would like to try and increase the value of the company’s stock. In this case, they want to retain control of the company and do not want to sell stock to outside investors. They also feel that the company’s debt is at a manageable level and do not want to borrow more money. What steps can they take to try and increase the price of the stock? Are there any conditions under which this strategy would not increase the stock price?

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

University Coursework Help
Buy Coursework Help
Homework Guru
Helping Hand
Top Essay Tutor
Quality Homework Helper
Writer Writer Name Offer Chat
University Coursework Help

ONLINE

University Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Buy Coursework Help

ONLINE

Buy Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Homework Guru

ONLINE

Homework Guru

Hi dear, I am ready to do your homework in a reasonable price and in a timely manner.

$62 Chat With Writer
Helping Hand

ONLINE

Helping Hand

I am an Academic writer with 10 years of experience. As an Academic writer, my aim is to generate unique content without Plagiarism as per the client’s requirements.

$60 Chat With Writer
Top Essay Tutor

ONLINE

Top Essay Tutor

I have more than 12 years of experience in managing online classes, exams, and quizzes on different websites like; Connect, McGraw-Hill, and Blackboard. I always provide a guarantee to my clients for their grades.

$65 Chat With Writer
Quality Homework Helper

ONLINE

Quality Homework Helper

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Country of origin codes - Bad frog case brief - Week 5 MAT 510 - Musical fountain in china with audio of bhagavad gita - New belgium brewery social responsibility - MVV, Org. Chart, Change - The financial statements of lioi steel fabricators - Anthropology Discussion post - Recibo (more) propinas que tú. - Use case diagram for student registration system - Guru nanak dev university engineering college amritsar - Statistics take home test answers - God grandeur figures of speech - HR Contributes at SYSCO - 63 pokes road boat harbour - Brilliant 20w frontier smart led twin flood light with sensor - Johnny b good chords - Enos printing corp uses a job order cost system - Jolly phonics flashcards powerpoint - Intercept vor radial g1000 - Sabas company has 20000 shares - Sociology 2 - The spinothalamic tract conducts impulses - 2-3 Page Answer CWA - Sheffield city council parking - Motor vehicle accident case study nursing - 1 lb of apples price - Are fish fingers halal - Computer preventive maintenance ppt - Project one pager template - Ul and ulc standards - Panera bread company case study answers - Hall company manufactures a single product - Rocksmith cable not working windows 10 - In february a paratrooper fell 370m - Garmin 430 user waypoint - Sociology - Sereach - Open source mobile operating system - Separation of the components of a mixture lab report answers - 2 cm diameter pvc pipe - Pocket pal science experiments - Reversible reaction of the dehydration rehydration of copper sulfate - Eaton power factor correction - Assignment-3 : Case Recommendations - Human animal interaction task - Chifley college mount druitt - Working With Controlled Communications - Thousand cranes chapter summaries - What firewall does global enterprises use - Stores material within the cell - 20 most common prefixes - Lamson Case - All about me presentation ideas - ME - Main - Week 2 - Homework 1 & 2 - Allusions in shrek 1 - Project case study - Force exerted by a machine - How to read literature like a professor chapter main points - Na hoku bird of paradise - In establishing warranties on hdtv sets - Utas bachelor of nursing fast track - Engineering an empire byzantine video questions - Shadow health tina jones abdominal assessment - Wk#5 Research paper And Discussion - Business Statistics - Proportional parts in triangles and parallel lines answers with work - From bottom to top how one provider retooled its collections - Mini Paper - Criminology - Hey soul sister meaning - The conditional tense italian - A child called it quotes with page number - What is the context of a research paper - How to find seasonal index - In the opening vignette, predictive modeling is described as - Mega giga tera peta - Orientation day macquarie university - Iso 9001 quality procedures sample - Logan bar cleft lip - Gandom in english - What are the behavioural adaptations of an echidna - Philosophy unit 6 paper - Idiot nation michael moore summary - Tracking is an assault on liberty summary - Vale of leven hospital consultants - Assignment 3 - Marvins miami ok weekly ad - Business intelligence - Order # 9381 - Finance wk 3 - Is coloxyl habit forming - Willy weather mission beach - Mersen littelfuse cross reference - The world at work handbook of compensation benefits pdf - Bluebeam revu measure tool - REply - Www mail actewagl com au - Gagne briggs theory - Http www stress org uk individual stress test - Cable subjected to a uniformly distributed load example