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all three pages are the same, i just wanted to scan the clearest page possible. ,,Stock Valuation at Ragan Engines,(Chapter 9 in textbook, p.298),Note: You may use either Excel or Word for this case. Please provide a typed case. Also, please note that while the substance of your report is key, the,organization and presentation of the report are also important. Concisely address the 5,questions on pages 298 and show your work (e.g., please show the formulas you,are using and the numbers used in the formulas).,Hints:, Use the formula,,r g,D,P,?,=,1,0 , where D1 = D0(1+g), You need to estimate the growth rate, so first solve for g using the formula discussed,in class. That is,,g = Retention ratio x ROE, In question #2, when calculating the industry average EPS, use the EPS figures,without accounting write-offs to get a more representative figure. Also, you can find the,industry growth rate using the same growth formula shown above (using the industry,retention ratio and industry ROE).,Note that, when finding the estimated stock price in #2, you will first need to find the,present value of the early stream of high growth dividends. Then use the constant growth,rate formula (i.e., growing perpetuity formula) to find the present value of the later,dividends which grow at the industry average growth rate (assumed to be a constant,growth rate). Refer to the non-constant growth example in the chapter 9 powerpoints., For question #4, you must calculate the percentage of the stock’s value that is,attributable to growth opportunities. To do this, first calculate the value of the firm’s,stock if there was no growth, i.e., a perpetuity, with g = 0. Then compare this value to,the stock value you calculated earlier in question #2 to get the proportion of the stock’s,value not attributable to growth opportunities. The rest would be the proportion that is,due to growth opportunities. Follow the assumptions in question #2, and use the industry,average required return., For question #5, use the growth rate formula (g = ROE x retention ratio) and solve for,ROE (using the assumptions from question #2).