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View Full Version : You have been given the following projections for Cali Corporation:


lilboardr52
Jun 30, 2011, 05:52 AM
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%.
·

RPM
= 4%.
·

Dividend payout ratio = 60%.
·

Growth rate = 8%.
Calculate the current price per share for Cali Corporation.

lilboardr52
Jun 30, 2011, 05:54 AM
According to the Yahoo Finance Bond Center, dealers are currently offering the US government's 8.5% 2020 Treasury Bond for “142.35.”

a. What is the price in dollars of the bond?

b. What is the amount of the coupon interest payment you would receive each year if you bought the bond? (assume annual payments)

c. How many payments would you receive if you bought the bond and held it to maturity? (In other words, how many years from now does the bond have to go before it matures?)

d. What is the bond's Yield to Maturity, or YTM, assuming you purchased it for the current offering price?

Curlyben
Jun 30, 2011, 06:03 AM
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