Example of market model, Finance Basics

Example of Market Model

Illustration:

For the past five (5) years, the MPS and DPS for XYZ Ltd were follows as:

 

1998

Shs.

1999

Shs.

2000

Shs.

2001

Shs.

2002

Shs.

MPS as at 31st Dec

DPS for the year

40

-

45

3

53

4

50

3

52

-

Required

Determine the estimated cost of equity/shareholders percentage yield for every of the years included.

Solution

Year

MPS

Capital gain

DPS

% Return

1998

40

-

-

-

1999

45

5

3

(5+3 /40) * 100 = (8/40) * 100 = 20%

2000

53

8

4

(8+4 /45) = (12/45) * 100 = 27%

2001

50

-3

3

(-3+3 /53) = (0/53) * 100 = 0%

2002

52

2

-

(2 +0 /50) = (2/50) * 100 = 4%

Posted Date: 1/30/2013 4:13:15 AM | Location : United States







Related Discussions:- Example of market model, Assignment Help, Ask Question on Example of market model, Get Answer, Expert's Help, Example of market model Discussions

Write discussion on Example of market model
Your posts are moderated
Related Questions
A manufacturing organisation has three production cost centres, the cutting department, the processing department and the finishing department, and two service cost centres, the st

The operating and cost data of ABC Ltd. are: Sales Rs. 20,00,000 Vari

How often does the "on the run" tsy change?

Briefly define the terms proprietorship, partnership, and corporation. Ans: The term proprietorship is used as a business owned by one person. Two or more than two people wh

Solutions to agency problem The bondholders might receive the following procedures to protect themselves from the process of the shareholders that might dilute the value of th

1. Using the variance-covariance matrix (∑) and the expected return vector (er) given in the appendix, calculate the set of weights that correspond to the portfolio that maximizes

Bill Smith, a manager of a restaurant/bar in Los Angele, is in the 25% marginal tax bracket and pays additional 5% in taxes to the state of California. Bill has 20,000 invested in

Define benefit plan for the employee participants

Information Signaling Effect Theory Advanced via Stephen Ross in year 1977, He argued such in an inefficient market; management can utilize dividend policy to signal significa

Define Meaning of Investment Meaning of Investment: Investment involves making of a sacrifice in the present with hope of deriving future advantages. Investment has many