Question
A company’s share is currently quoted at a market
price of ₹120 per share. The company is expected to pay a dividend of ₹12 per share in the next year, and dividends are anticipated to grow at a constant rate of 5% per annum indefinitely. Using the Gordon Growth Model (Dividend Discount Model), calculate the cost of equity (Ke) for the company.Solution
Ke = (D1 / P0) + g = (12 / 120) + 0.05 = 0.10 + 0.05 = 15%.
A and B entered into a business investing their capital in the ratio of 14:25, respectively and the respective ratio of time for which they made their i...
A, B, and C form a partnership with their investments in the ratio of 4:5:6. After 6 months, A raises his investment by 25%, B reduces his investment by...
‘A’ and ‘B’ together started a business by investing their capitals in ratio 3:2, respectively. Nine months later, they both invested Rs. 500 mo...
Ajay and Akshay started a business with initial investments of Rs. 12,000 and Rs. 15,000, respectively. After 6 months, Ajay increased his investment by...
Three individuals, S, V, and G, started a business together. S contributed 2/5 of the total investment, V contributed 4/7, and the remaining amount was ...
Amit, Binod, and Chandu jointly started a business with initial investments of Rs. 'x', Rs. 'x + 2000', and Rs. '4x', respectively. After eight months, ...
P and Q together started a business with initial investment in the ratio of 1:3, respectively. The time-period of investment for P and Q is in the ratio...
Three partners, A, B, and C, invest Rs 12,000, Rs 15,000, and Rs 18,000 respectively in a business. After one year, the total profit generated is Rs 22,...
Abhijeet and Vivek jointly initiated a business. Abhijeet contributed 60% of the total investment made by both of them. Abhijeet invested his amount for...
A and B started a business investing ₹80 000 and ₹1 lakh respectively. After 6 months, A added ₹40 000 more. Find A’s share of ₹54 000 profit ...
