|Income Statement for the Year Ending December 31 (Millions of Dollars) 2016 Net Sales 800.0 $ $ Costs (except de preciation) Depreciation 576.0 60.0 Total operating costs 636.0 Earning before int. & tax 164.0 $ 32.0 Less interest $ Earning before taxes Taxes (40%) 132.0 52.8 Net income before pref. div. 79.2 Preferred div. 1.4 Net income avail. for com. div 77.9 Common dividends 31.1 Addition to retained earnings $ 46.7 Number of shares (in millions) Dividends per share 10 $ 3.11 ll Balance Sheets for December 31 (Millions of Dollars) Assets 2016 Cash 8.0 Short-term investments 20.0 Accounts receivable 80.0 Inventories 160.0 Total current assets 268.0 Net plant and equipment 600.0 Total Assets 868.0 Liabilities and Equity 2016 $ Accounts Payable Notes payable 16.0 40.0 Accruals 40.0 Total current liabilities 96.0 Long-term bonds Preferred stock $ $ 300.0 15.0 Common StocK (Par plus PIC) 257.0 Retained earnings 200.0 Common equity $ 457.0 Total liabilities and equity $ 868.0 Projected ratios and selected information for the current and projected years are shown below |Inputs Actual 12/31/16 Projected 12/31/18 Projected 12/31/17 Projected Projected 12/31/20 12/31/19 15% 10% Sales Growth Rate 6% 6% Costs/Sales 72% 72% 72% 72% 72% 10% 10% Depreciation/(Net PPE) 10% 1% 10% 1% 10% 1% 1% 1% Cash/Sales |(Acct. Rec.VSales 10% 10% 10% 10% 10% 20% Inventories/Sales 20% 20% 75% 20% 20% (Net PPENSales (Acct. Pay.VSales Accruals/Sales 75% 75% 2% 75% 75% 2% 2% 2% 2% 5% 5% 5% 5% 5% Tax rate 40% 40% 40% 40% 40% 10.5% 10.5% 10.5% 10.5% Weighted average cost of capital (WACC) 10.5% e. Calculate the price per share of common equity as of 12/31/2016 Millions except price per share Actual 12/31/16 Value of operations Value of short-term investments Total value of company - Total value of all debt - Value of preferred stock Value of common equity Divided by number of shares Price per share |Income Statement for the Year Ending December 31 (Millions of Dollars) 2016 Net Sales 800.0 $ $ Costs (except de preciation) Depreciation 576.0 60.0 Total operating costs 636.0 Earning before int. & tax 164.0 $ 32.0 Less interest $ Earning before taxes Taxes (40%) 132.0 52.8 Net income before pref. div. 79.2 Preferred div. 1.4 Net income avail. for com. div 77.9 Common dividends 31.1 Addition to retained earnings $ 46.7 Number of shares (in millions) Dividends per share 10 $ 3.11 ll Balance Sheets for December 31 (Millions of Dollars) Assets 2016 Cash 8.0 Short-term investments 20.0 Accounts receivable 80.0 Inventories 160.0 Total current assets 268.0 Net plant and equipment 600.0 Total Assets 868.0 Liabilities and Equity 2016 $ Accounts Payable Notes payable 16.0 40.0 Accruals 40.0 Total current liabilities 96.0 Long-term bonds Preferred stock $ $ 300.0 15.0 Common StocK (Par plus PIC) 257.0 Retained earnings 200.0 Common equity $ 457.0 Total liabilities and equity $ 868.0 Projected ratios and selected information for the current and projected years are shown below |Inputs Actual 12/31/16 Projected 12/31/18 Projected 12/31/17 Projected Projected 12/31/20 12/31/19 15% 10% Sales Growth Rate 6% 6% Costs/Sales 72% 72% 72% 72% 72% 10% 10% Depreciation/(Net PPE) 10% 1% 10% 1% 10% 1% 1% 1% Cash/Sales |(Acct. Rec.VSales 10% 10% 10% 10% 10% 20% Inventories/Sales 20% 20% 75% 20% 20% (Net PPENSales (Acct. Pay.VSales Accruals/Sales 75% 75% 2% 75% 75% 2% 2% 2% 2% 5% 5% 5% 5% 5% Tax rate 40% 40% 40% 40% 40% 10.5% 10.5% 10.5% 10.5% Weighted average cost of capital (WACC) 10.5% e. Calculate the price per share of common equity as of 12/31/2016 Millions except price per share Actual 12/31/16 Value of operations Value of short-term investments Total value of company - Total value of all debt - Value of preferred stock Value of common equity Divided by number of shares Price per share