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Find out the value of the firm according to MM approach

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Question - A Ltd belongs to a risk class where P/E ratio is 8.333. It currently has 1 lakh shares selling at par value. The firm was planning for a dividend declaration of Rs. 6 at the end of the year. The firm is operating in a tax-free zone and has a net income of Rs 10 Lakh. The new investment for the year ahead is Rs. 20 Lakh. Find out the value of the firm according to MM approach. (a) if the company declares dividend (b) If the company do not declare any dividend.

Reference no: EM133021604

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