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    Calculate the current price per share for Cali Corporation.

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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 = $12
    Variable cost per unit = $6
    Fixed costs = $10,000
    Long-term debt = $15,000
    Interest rate on long-term debt = 8%
    Tax rate = 40%
    Dividend payout ratio = 60%
    Expected long-term growth rate = 8%
    Shares of common stock outstanding = 10,000 shares
    Beta = 1.4
    Current rate on government T-Bonds = 5%
    Expected return on the stock market = 9%

    Calculate the current price per share for Cali Corporation.

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    https://brainmass.com/business/finance/calculate-current-price-per-share-cali-corporation-327140

    Solution Preview

    First, we need to calculate the earnings per share and dividend paid per share.

    Sales (10,000 units x $12) 120,000
    Less: Variable cost (10,000 units x $6) 60,000
    Total Contribution Margin 60,000
    Less: Fixed costs 10,000
    Earnings before ...

    Solution Summary

    This solution is comprised of a detailed explanation to calculate the current price per share for Cali Corporation.

    $2.19