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?
Explain how using a risk-adjusted discount rate enhances capital budgeting decision making compared to by using a single discount rate for all projects? The risk-adjusted disco
ON THE BASIS OF FLEXIBILITY • Fixed budget: this is designed to stay unchanged irrespective of the volume of output or turnover attained. The budget remains unchanged over
Q. Explain Systematic Risks in Financial management? Systematic risk in non-diversifiable and is associated with the securities Market as well as economic, sociological, politi
DIVIDEND POLICY Dividends provide the portion of a firm's net earnings which are paid out to the shareholders. the objective of financial management of maximizing the share
What are the requirements of IFRS 8 IFRS 8 requires an organisation to adopt management approach to reporting on financial performance of its operating segments. General idea
what are the advantages and disadvantages of incremental budgeting?
discuss the applicability of an operating cycle considering broilers?
Prices and Yields The face value of the government security is Rs.100 or Rs.1,000. Earlier, that is, before 1950s the government bonds were issued at a discount. There was no f
state the importance of gearing in accounting Gearing is one of the most extensively used terms in accounting. Gearing is the relationship between debt and equitywhich means th
Explain the following term: Perpetual bonds, Floating rate bonds, Index-linked bonds and Callable bonds. Perpetual bonds (also termed as consols) are never mature. This
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