INPUT DATA (Totals in Millions): KEY OUTPUT: Stock price (Po) $30.50 Debt: Earnings per share (EPSO) $2.30 YTM Last dividend (Do) $0.46 YTC Analysts "L-R" growth rate 16.00% Payout ratio (PO) 20.00% Common Equity: Constant DCF k CAPM k k=kd+RP 7.76% 5.46% No. shares outstanding (N) 6.2261 Return on market (km) Risk-free rate (krf) 12.57% 6.57% ks (Avg CAPM + RP) Beta (b) 1.30 Preferred Stock: Risk Prem over own bond, RP 4.00% kps kd for avg. A-rated firm 8.00% WACC1 Price of Preferred Stock $105.00 WACC2 Preferred dividend (Dp) $8.00 RE Breakpt No. prf shrs out. (Million) 0.10 Accepted Projects: Par value of bonds $1,000.00 Num./rank ROR Coupon rate (semiannual) 10.00% 1 13.00% Current price $1,209.00 2 12.00% Call price $1,100.00 3 11.00% Years to maturity (2012) 17.00 10.00% Years to call (1998) 3.00 Total Capital Budget = Target cap structure: Tax rate (T) 40.00% For'cst comm earnings, 1996 $17.127 % long-term debt Depreciation $4.50 % preferred stock Flot. cost, common 30.00% % common equity Flot. cost, preferred $2.50