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Determining the market price of the share

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Sandy and company has 10 million shares at the market price of INR 150 per share. The company intends to pay dividends of INR 20 per share at the end of the financial year 2010. The capitalization rate of the firm is 15%. Using MM model, determine the following:

a) The market price of the share at the end of the financial year 2010 if the dividends are paid and when they are not paid.

b) The number of shares to be issued by the company if it earns INR 100 million pays dividends and intends making a fresh investment of around INR 60 million.

Reference no: EM132638276

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