# Calculate the current price per share for Cali Corporation.

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.

© BrainMass Inc. brainmass.com December 15, 2020, 6:01 pm ad1c9bdddfhttps://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.