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Calculate the intrinsic value of a xyz share

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XYZ Ltd's last annual earnings were Rs. 10 per share and dividends were just paid out. 40% of earnings are paid out as dividends and this ratio is expected to be maintained in the future. XYZ has a beta of 1.2. The risk free rate is 8% and the expected return on the market portfolio is 15%. You expect XYZ to earn a ROE of 20% per year on all reinvested earnings.

Question 1: Calculate the intrinsic value of a XYZ share

Reference no: EM132533122

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