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 plus growth in dividend method
When the dividends of the firm are predictable to grow at a constant rate and the dividend payout ratio is constant, this technique may be used for calculating the cost of equity shares.
Where, Ke = cost of Equity capital, D = Expected dividend per share, g = rate of growth in dividends, MP = Market price of equity shares and NP = Net proceeds per share
Illustration:
A Co. plans to issue 1000 new shares of Rs.100 each at par. The floatation costs are expected to be 5% of the share price. The co. pays a dividend of Rs.10 per share initially and the growth in dividends is expected to be 5%. (a) Compute the cost of new issue of equity shares. (b) If the current market price of an equity share is Rs.150, calculate the cost of existing equity share capital
Solution: (a) K = D + g = 10 + 5% = 15.53%
RISK RETURN RELATIONSHIP A business operates in a market environment, which is not within its control. It is exposed to several dangers from the internal with external sources
"A" Round Financing "A" Round Financing is the first main round of business financing through private equity investors or venture capitalists. In private equity investing, an "
Q. Explain the Average Rate of return Method? Average Rate of return Method (ARR): This method is as well known as Accounting Rate of Return Method. It is on the basis of accou
Reforms and Outlook Pension funds in India is an area that is yet to be fully explored compared to those of other economies of the world. The pension reforms are expected to fa
Currently, many foreign firms from both developed and developing countries obtained high-tech U.S. firms. What might have motivated these firms to obtain U.S. firms? Answer: Se
you are checking a financial analyst''s recommendation. the analyst projects a company''s stock price to be P72 per share in 3 years. the most recent annual dividend was P1.68 per
Problem There are two investment plans in the market whose details are given below based on which you need to decide which investment plan you need to select. Propose which inv
What are the objectives of the Insurance Companies? Insurance companies: The main objective of insurance companies is to prevent individuals and firms (termed as policy-h
I just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. I also told that the dividends would grow continual
Floaters that can be classified under this head are: 1. Stepped Spread Floaters 2. Extendible Reset Bonds
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