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?
Q. Future Value of a Series of Equal Cash Flows? Quite often a decision may result in the occurrence of cash flows of the same amount every year for a number of years consecuti
VK Ltd a multi-product Company, furnishes you the following data relating to theyear 2000.First Half of the year Second Half of the yearSales Rs. 45,000 Rs. 50,000 Total Cost Rs. 4
Nortel is considering the purchase of a new call routing system. The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years. The CCA rate as
Is there an optimal capital structure? What is it and how can it be calculated? There is no optimal capital structure. Capital structure is a variable which depends on the incl
ACT presently is all-equity financed. This reflects the stance of the former CEO, a dominant personality who stated repeatedly: "I don't want us to be in thrall to the demands of t
what is logical process modelling? what is physical modelling?
The managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch. Company A; has deliberately paid no dividends for th
1. Discuss the various techniques of inventory management for efficient working capital management. 2. Discuss the importance of dividend decisions. What is MM theory of div
Financial Reports: Each person has their own perception on what a particular financial report should contain, and invariably in what they consider to be the important factors w
Q. Show the Graphic Presentation of Net Income Approach? Graphic Presentation of Net Income Approach: - Net Income approach is described graphically as follows: In the
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