Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Dividend yield method
As per this method, the cost of Equity capital is the discount rate that equates the present value of expected future dividends per share with the net proceeds (or current market price) of a share.
K = D /NP (or) D / MP
Where, Ke = cost of Equity capital, D = Expected dividend per share, MP = Market price per share and NP = Net proceeds per share
Illustration:
A company issues 1000 equity shares of Rs.100 each at a premium of 10%. The company has been paying 20% dividend to its equity shareholders for the past 5 years and expects to maintain the same in the future also. Compute the cost of equity capital. Will it make any difference if the market price of equity share is Rs.160?
exercise
Restatement of investment appraisal In the following solution the tax allowances in relation to the initial outlay on equipment are evaluated separately. Other approaches are a
Question 1 There are several elements which you can take into consideration, while budgeting a project. Describe these elements Question 2 Explain the different methods/source
Companies with rapidly growing levels of sales do not need to worry about raising funds from outside the firm. Do you agree or disagree with this statement? Explain. Disagree
The key parameters taken into account while rating a debt instrument are as follows: 1. Industry Evaluation - This involves an evaluation of the
Jessica is given the opportunity to invest $5,000 now and receive $5,700 at the end of one year. However, she could only invest $1,000 of her own money and would need to borrow the
A with-profit whole life assurance policy was issued to a life then aged 25 with: • basic (initial) sum assured of S = $100,000; • bonuses added to sum assured at the end of ea
Define how earnings available to common stockholders and common stock dividends paid from the current income statement influence the balance sheet item retained earnings. The a
What is triangular arbitrage? What is a condition that will give increase to a triangular arbitrage opportunity? Answer: Triangular arbitrage is the method of trading out of th
comparative analysis on these two food retailing giants
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd