Stock Valuation at Ragan Technologies Incorporated

PLEASE MAKE SOME SMALL CORRECTIONS TO UPLOADED DOCUMENT!!!!
hello, calculations are in. the document just need to be replaced with numbers
PROFESSOR RESPONSE
The hint I will give is that EPS = $5.35
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Hi
For #1 I provided in the Ask the Professor that the earnings per share is $5.35. That x the 300k shares will give you the total earnings.
This answer impacts each answer down the line.
I will give you half credit for each question. I will also let you resubmit any time during the semester if you want a higher grade.
The other one that is tricky is #5. If you use D1/(R-g) knowing that D0 = $640k that will help you find this answer.
DOCUMENT TO BE CORRECTED
FeaarFFINC 440 Security Analysis and Valuation
Project 1: The Case Study of the Stock Valuation at Ragan Technologies, Incorporated
Overview
Project 1 is the Fundamental Analysis of Reagan Technologies, Incorporated to explore its
current financial position and identify possible shortcomings and future threats. Your
fundamental analysis will examine the present stock price, dividend payout ratio, earnings per share, price-earnings ratio, and the company’s growth rate. In addition, this method is used to investigate stock valuation indicators. You can use an MS Excel spreadsheet to make your calculations. Next, you can submit an MS Word document and an Excel spreadsheet. To receive full academic credit, please show your calculations. Finally, submit Project 1 to the Project 1 Assignment Folder using the following file(s) name Project01_JohnDoe.docx or Project01_JohnDoe.xls.
Overview of the Company
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%.
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The Stock Valuation of Reagan Technologies Inc.
1. The total earnings are
=$640,000.
2. The payout ratio is the percentage of earnings that are paid out as dividends.
In this case, 21% of earnings are paid out as dividends.
21/100
=0.21
3. The retention ratio is 0.79
The retention ratio is the percentage of earnings that are reinvested in the company, rather than paid out as dividends. In this case, 79% of earnings are reinvested.
79/100
=0.79
4. What is the total equity value of the company?
The total equity value of the company is the sum of the market value of all the company's outstanding shares. In this case, the company has 300,000 shares outstanding, and each share is worth $10.40, for a total equity value of $3,120,000.
300000*10.40
=$3,120,000.
5. The total equity value of the company is $300,000.
This can be calculated by multiplying the number of shares outstanding (300,000) by the value per share ($1.00).
300000*$1.00
=$300000
6. The value per share is $1.00.
This can be calculated by dividing the total equity value of the company ($300,000) by the number of shares outstanding (300,000).
300000/300000
=$1.00
7. The industry growth rate is 7.81% and the industry PE is
$18.08 / $1.51
= 12.00.
In comparison to the industry as a whole, Reagan Technologies not only has a greater growth rate but a lower PE ratio. This suggests that the firm is expanding at a quicker rate than the industry average and that the market currently undervalues the company.