Projections for cali corporation

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Reference no: EM132032638

You have been given the following projections (expectations) 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

Interest rate on outstanding bonds = 8%

Tax Rate = 40%

Shares of common stock outstanding = 10,000 shares

Beta = 1.4

Riskfree Rate = 5%

Market Return = 9%

Dividend Payout Ratio = 60%

Growth Rate = 8%

If the current stock price of Cali is $42 , is this a good buy? Show all work

Reference no: EM132032638

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