Customer Service Chat
Get quote & make Payment
Security Analysis & Portfolio Management, Management Theories
ABC Ltd. has an investment opportunity available which will involve a capital outlay in each of
the next 2 years and which will produce benefits during the following 3 years. A summary of the
financial implications of this investment is given below:
Year Cash Flow (Rs ‘000)
ABC Ltd. currently has 1,00,000 shares in issue. The dividend just paid was Rs 15 per share.
In the absence of the above investment, dividends are expected at this level for the next 3
years but will then demonstrate perpetual growth of 10 per cent p.a. ABC Ltd. is currently all
equity financed and the required rate of return of the equity investor is estimated to be 18 per
cent. The company has a long established policy of not using any debt finance and, because
of the current depressed state of the stock market, could not in the near future issue new
equity. The only possible way of financing the investment is, therefore, to reduce the
dividend payments made in the next 2 years. Cash received from the new investment will all
be distributed. Growth in dividends @10 per cent will also be maintained because of other
a) Calculate the current share price of ABC Ltd.
b) Calculate the share price after the investment has been accepted, assuming the market
knows of the dividend changes that will result from the investment using a Dividend
Posted Date: 4/21/2012 2:48:09 AM | Location : United States
Ask an Expert
Security Analysis & Portfolio Management, Assignment Help, Ask Question on Security Analysis & Portfolio Management, Get Answer, Expert's Help, Security Analysis & Portfolio Management Discussions
Write discussion on Security Analysis & Portfolio Management
Your posts are moderated
Write your message here..
Strategic management, What are the characteristics of protect position, bui...
What are the characteristics of protect position, build selectively and invest to build strategies in GE Metrix?
Microbiology, what are the applications of microbiology?
what are the applications of microbiology?
Components of the strategic planning process, 1. Briefly explain the monito...
1. Briefly explain the monitoring, measuring, and adjusting components of the strategic planning process. The strategic plan are designed based on the predictions and assumptions,
Human Resource Management, What are the emerging issues in Human Resource m...
What are the emerging issues in Human Resource management
#title.COST., WHAT are the types of total cost
WHAT are the types of total cost
Planet maths, page 130 is doig my
page 130 is doig my
Principles of management, note on neo classical & modern theoris of organis...
note on neo classical & modern theoris of organisation
Strategy of how to implement your strategy successfully, Assignment for Pro...
Assignment for Project Management 1. Pick the environment and the idea followed by a strategy of how to implement your strategy successfully. Prepare: 1. Define
Give an account of emerging trends in Management, give an account of emergi...
give an account of emerging trends in Management
International business environment, Hosmer''s Model of ethical analysis for...
Hosmer''s Model of ethical analysis for management decisions.does this model help us to understand the factors affecting managerial decisions across cultures?
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
IT Courses and Help
Why Us ?
~24x7 hrs Support
~Quality of Work
~Time on Delivery
~Privacy of Work
Human Resource Management
Literature Review Writing Help
Follow Us |
T & C
Copyright by ExpertsMind IT Educational Pvt. Ltd.