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Question
Calculate the current price per share (P0) for Olson Corporation, given the following information. The data all pertain to the year just ended.
Sales = 10,000 units
Sales price per unit = $10
Variable cost per unit = $5
Fixed cost = $10,000
Long-term debt outstanding = $15,000
rd on all long-term debt = 5%
Tax rate = 30%
Common stock shares outstanding = 10,000 shares
Beta = 1.5
rRF= 5%
rM= 9%
Dividend payout ratio = 40%
Growth rate in earnings and dividends = 7%
a. $39.20
b. $57.84
c. $29.43
d. $61.90
e. None of the above.
Answer
This answer is hidden. It contains 357 characters.
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