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%
Explain why accounting profits and cash flows are not the same thing. Stock worth depends on future cash flows, their riskiness and their timing. Profit calculations don't con
What is meant by deadweight loss? Why does a price ceiling usually result in a deadweight loss? Deadweight loss considers to the benefits lost to either consumers or producers
Explain the Strategic alliance Two or more organisations agree to work and collaborate informally together however remaining independent from one another. Simila
Q. Example On modigliani and miller approach? The subsequent is the data regarding two companies X and Y belonging to the same risk class: Company X
A friendly potential acquirer sought through a goal organization threatened by a less welcome suitor.
Q. Define Double-Entry Bookkeeping? Double-Entry Bookkeeping - Method of recording financial transactions in that every transaction is entered in two or more accounts and inclu
What is the operating leverage effect and what causes it? What are the potential benefits and negative consequences of high operating leverage? The phrase operating leverage e
Explain about the term investment intermediaries. Investment intermediaries: Investment intermediaries contain finance companies, mutual funds and investment banks and se
Do you provide help in college level Managerial Finance?
What is an agent? What are the responsibilities of an agent? An agent is a person who has the actual or implied authority to act on behalf of another. The owners whom the agen
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