Compare reagan technologies with the industrys growth

Reference no: EM133557619

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%.

INSTRUCTOR HINTS

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.

Hint for Question 2: The case provides the dividend payout amount. The dividend payout amount divided by the total earnings is the payout ratio.

Hint for Question 3: The opposite of the payout ratio is the retention ratio. The two ratios together would = 100%.

That should help you get the first three questions.

The Stock Valuation of Reagan Technologies Inc.

What are the total earnings?

What is the payout ratio?

What is the retention ratio?

What is the company's growth rate?

What is the total equity value of the company?

What is the value per share?

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

Reference no: EM133557619

Questions Cloud

Calculate the cost of capital for your company : Calculate the cost of capital (WACC) for your company. This will require you to estimate the following: (use yahoo finance to get the data)

What emotions do you feel in listening : What emotions do you feel in listening? What is the poet trying to tell us? Do you have any insights into what it is like to be transgender?

What specific elements of the erm framework support : How can technology companies use ERM to overcome the ethical dilemmas identified in the article? What specific elements of the ERM framework support

Discuss your experience with and awareness of inclusive : Discuss your experience with and/or awareness of inclusive language. Share an example in your own writing where you use inclusive language or where revision

Compare reagan technologies with the industrys growth : Compare Reagan Technologies with the industry's growth and PE rates. What are the reasons for the differences? Will this affect future growth?

Describe miss moore and her relationship with the kids : how it works in "The Lesson." For example, how does the setting contribute to the story, and how might it be different in another place or time

How much will the mean value of adult mass change over : How much will the mean value of adult mass change over one generation of natural selection when Australasian snappers are raised at a high initial density

What are purchase of equipment may be attractive to martha : What are the reasons the purchase of the equipment may be attractive to Martha?

How did the partnerships between the mother and teachers : How did the partnerships between the mother and teachers/providers create a positive experience for the family? How did it create a difficult/negative

User Account

All Pages