Cali Corporation projections: Calculate current price of the stock.
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You have been given the following projections for Cali Corporation for the coming year.
Sales = 10,000 units
Sales price per unit = $10
Variable cost per unit = $5
Fixed costs = $10,000
Bonds outstanding = $15,000
rd on outstanding bonds = 8%
Tax rate = 40%
Shares of common stock outstanding = 10,000 shares
Beta = 1.4
rRF = 5%
rM = 9%
Dividend payout ratio = 60%
Growth rate = 8%
Calculate the current price per share for Cali Corporation.
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Solution Summary
The solution shows all the formulas and calculations to arrive at a price for the stock.
Solution Preview
Sales =10,000*10 = $100,000
Variable cost = $5*10,000= $50,000
Fixed costs= ...
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