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 why accounting profits and cash flows are not the same thing. Ans: Stock value relies on future cash flows, their timing, and their riskiness. Profit calculations do n
What do financial managers look for when they analyze pro forma financial statements? Later than the pro forma financial statements are complete, financial managers analyze the f
Q. Explain what is Comprehensive Income? Comprehensive Income - Change in EQUITY of a business enterprise during a period from transactions and other circumstances and events f
Briefly Explain Non Financial Objectives Monetary statements of any sort are only an expression of organisational activities that can be measured. Lots of the activities of an
Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k
mention the advantages and disadvantages of the traditional approach
Q. Basic Methods of Risk Management? Risk is inherent in business and hence there is no escape from the risk for a businessman. However, he may face this problem with greater c
How is international financial management different from domestic financial management? Answer: There are three main dimensions that set separately international finance from
Lease A lease is a contractual arrangement allowing one party the use of some exact assets for a specific times period in exchange for a payment it is same as a rental arrangem
They are issued in the local market by a domestic borrower and are usually denominated in the local currency. For example, US companies issuing bonds to US reside
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